Tag Archives: limitation act 1963

The Laws of Limitation are statutes of peace and repose, statues that manifest the policy of law in lending its aid only to those who are vigilant and not those who sleep over their rights (Vigilantibus Non Dormentibus Juria Subvenient). Limitation laws suggest that all disputes/claims/remedies should be kept alive only for a legislatively fixed period of time, for otherwise disputes would be immortal when man is mortal. Though arbitrarily fixed limits may seem unfair to some, however they are most pragmatic insofar as there is rarely any justice in stale claims – and evidence also gets destroyed, hence keeping remedy alive serves no useful purpose.

Law of Limitation is rigid – courts have no power to free the litigant from its shackles by using its inherent powers, however the rigidity of the law has been cut down by providing the principles of exception & Exclusion (S.4-24 of the Limitation Act, 1963) these principles make just allowances ex debito justitate and are based on one rational principle or the other.

S.3 of the aforesaid act – mandates the court to dismiss a suit even though limitation is not set up as a defence. Normally in actual practise – court frames a preliminary issue on the question of limitation as the same relates to a bar of law, if the bar of limitation is apparent on the face of the plaint – it may also entail Rejection u/o 7 R 11 of the CPC. Otherwise evidences are taken – which leads to a dismissal or the suit continues.

It is pertinent to remember that Limitation Act does not extinguish the right but negatives its remedial qualities – by turning it into an imperfect right – i.e right without a corresponding remedy. Since it seemingly is at cross purposes with the celebrated maxim of ubi jus ibi remedium – courts have constantly held that when there are two views possible one that saves the remedy should be preferred.

Some Important Areas of the Law of Limitation.

S.4 – is based on the principle of actus curiae neminem gravabit – Act of Court shall prejudice no man, and lex non cogit ad impossibilia. When the period of limitation of insttituing a suit, making an application or filing an appeal expires on a day when court is closed (completely or during any part of it’s working hours) the same can be done on the day when court re-opens. In a catena of decisions problems arose as – case was filed in a wrong court and then S.4 was attempted to be read together with S.14 – to exclude that period. However this contention was negative by the SC in Ami Chand v. UOI (1973) placing reliance up PC Decision in Maqbul Ahmed v. Pratap Narain. That to gain the benefit of S.14 – original suit should have been filed within the prescribed period. Which was not the case here – as S.4 being a principle of exception allows filing after PP is over as opposed to one excluding the period or the POL. Hence the court for the purposes of S.4 means proper court.

S. 5 also is a principle of exception – which allows filing (appeal & applications (other than O.21) after the expiry of Prescribed Period – if sufficient cause is shown. The phrase ‘sufficient cause’ has to be interpreted liberally, keeping in mind at all times that a litigant normally does not stand to benefit from delay – on the contrary there is always a chance of his losing his right altogether. Hence an interpretation that advances substantial justice has to be accorded. Court’s have to show utmost consideration to a suitor unless malafide or negligence is attributable to him. In this regard, barring a few decisions, courts have repeatedly refused to make special exceptions in favour of government, notwithstanding the impersonal machinery. However J.Chandrachud however in G.Ramegowda v. Special Land Acquisition officer (1988) has held that a certain amount of latitude is not entirely impermissible. Taking cue of this lower courts have been apparently letting the burden of proof of discharging ‘sufficiency’ fall light upon the government. Which is a prudent practice, since in a variety of cases – the adage “what is everyone’s is nobody’s in actuality’ becomes true – and it is the tax payer/revenue that suffers when the government lapses.

S.6/7/8 – together represent a well knit legislative scheme wherein – limitation period is excluded during period when litigant could not have sued on account of minority/insanity/idiocy. However such disability should be present at the time from which the period of limitation is to be reckoned. Subsequent disability/inability would not stop the continuous running of time (S.9). However strict application of this rule would have done injustice to other party, insofar as their rights would be uncertain for long periods of time. To counter this – full period of limitation to be accorded after disability ceases is elongated to a maximum of 3 years. This strikes a perfect balance of conflicting interests of the disabled and the other party.

The Principle of Continous running of time is suspended only in one situation where – the hand to give & receive is the same i.e to prevent conflict of interest and duty. This is envisaged in S.9 Proviso – wherein during the time a debtor holds the letter of administration of his creditor, the period of limitation for recovery of debt stands suspended.

S.10 – envisages the principle of no limitation in matters of trust expressly created for specific purposes. In common parlance a trustee is not immune from legal proceedings with respect to any suit relating to property in his hands as a trustee, by any length of time.

S.11 – makes clear that the period of limitation has to be seen w.r.t lex fori – i.e the law of the forum where the action is brought and not the one where the contract was formed (lex loci contractus)

S.12 – excludes the day from the Period of Limitation is to be reckoned, plus when a decree/order is appealed against the date of judgment – the time properly required in obtaining a copy of the judgment/decree.

S.13 – provides for a situation where leave to sue in forma pauper is sought (u/o 33 of the CPC) is rejected – and the applicant later pays up the court fees. This principle deems court fee as paid in the first instance, and negatives the chances of a situation where period of limitation has lapsed during the prosecution of such application.

S.14 – a principle frequently pushed into action – where a person spends time pursuing a remedy in a court which from jurisdictional incompetency is unable to try it. However if the person does so without due diligence i.e without due care and caution. He is not allowed to exclude that period from the overall period of limitation. Here a little flexibility is projected by the courts as at least some amount of lack of diligence/indiscretion is implicit in very act of filing it in the wrong court, however the same should not amount to a complete carelessness – if the benefit of this section is to be sought.

S.15 also excludes certain periods – for eg : where filing of a suit or execution application is stayed – the period during which the stay operates is excluded in computing the period of limitation. Other exclusions include – time taken in taking a sanction/permission or where the defendant(s) are outside India, or where a purchaser at a court auction seeks to sue for possession – the period during which such sale in which he gets title is sought to be set aside – is excluded.

S.17 manifests the policy of law – that fraud ought to benefit none – and no amount of time – can turn an illegality into legality. It sends out a clear message to those in fraud – that by no lapse of time can they be allowed to keep the fruits of their ingenious villainy. This principle excludes the period during which a person was labouring under fraud so as to be unaware of his right and its violation, or could not bring a suit as he was forced not to. Though period after which the person could have discovered with reasonable diligence the fraud or where force ceased to operate is not excluded. The section also applies to suits based upon documents – where the same are concealed. It has application with respect to execution petitions also.

S.18 – 20 are related to acknowledgements – which forms part of larger doctrine of Admissions (S.21 of IEA) these provisions provide for a fresh/renewed period of limitation on each admission/acknowledgment of liability, for each admission (self harming and hence carrying with it implicit guarantee of truth) affords proof of existence of jural relationship and of subsisting liability.

S.18 deals with acknowledgments in writing/signed by person under liability or predecessor in title. It goes on to state that acknowledgment need not be a promise to pay, need not to be express or in as many words, but if the jural relationship is capable of being derived by implication (necessary) then the same would amount to an admission.

S.19 deals with acknowledgments evidenced in payments towards debts or interests on legacy, but they should also be recorded in writing/signed.

Cheques as long as they are not encashed do not fall within the purview of S.19. The same applies to a dishonoured cheques as well. However this may expose people to fraud, as a creditor may on the assurance of a cheque issued to him, forbear to sue and in the process period of limitation may run out, and if that cheque bounces – is he left with no remedy ? Well not in S.19 – however the courts have held it to be documented acknowledgement, duly signed hence satisfying the elements of S.18.

S.20 is in a sense supplementary to aforesaid Ss.18/19 insofar as it defines as to who are persons who are duly authorised to make admissions on behalf of a person.

Courts have interpreted these liberal provisions relating to admissions liberally so as to extend their beneficial scope. Statements capable of two views – have been held to be admissions so as to protect the right from turning imperfect.

S.21 talks about period of limitations vis-à-vis parties added or substituted in a suit. The problem that arises here is the suit or the Cause of Action may be barred with respect to them when they are sought to be joined (O.1 R 10), and as on expiry of limitation against them a valuable right viz. not to face any action accrues to them, they are taken to have been made parties on the date of impleadment i.e date of application of impleadment, if allowed. However this may result into injustice sometimes – which is just what the proviso seeks to counter. The proviso provides for a relating back effect, a legal fiction in case court is satisfied that such party could not be joined due to mistake in good faith. It may deem such parties to have been joined in the first instance, so as to circumvent the bar of limitation in cases which demand such judicious indulgence.

S,22 contain the principle of de, die et diem – that is day to day – in a continuing cause of action period of limitation is renewed each moment as long as the wrong continues. For eg : trespass, nuisance, defamation etc.

S.27 – the only exception to the general effect of the act in barring only the remedy and not the right. This section, in cases of recovery of possession, if an action is not brought within the period stipulated – destroys the very right. Also known as the doctrine of adverse possession – if use of property/its care or attempt to regain is foregone for a period – and an adverse title being established is not opposed to through the instrumentality of law or otherwise. The other person does acquire a valid title. This is baffling for a reasonable man, how does some years of illegality turn into a legality. This concept of adverse possession is affront to the notions of justice and equity and run counter to modern ideas of propriety rights. The Supreme Court has gone to the extent of saying that – adverse possession is an area where justice and law do not happily co-incide. Keeping in mind this observation and the inherent unjust nature of this principle, courts have been consistently insisting on a very rigid satisfaction of conditions – only after which adverse possession ripes into title. These conditions have to be specifically claimed and proved.

The preposition before Court is suppose A gets property from B under an agreement to sell, A has got possession and is ready to fulfil his obligations to fulfill the transaction, but B is not similarly enthusiastic about it. The agreement to sell is not registered – in such a situation A by virtue of S.53A is entitled to protect his possession by resort to what is known as part performance theory. He also has the option of instituting Specific Peformance Suit within 3 years of default/knowledge of default/date fixed for performance. He does not file for SP within that period. Later B seeks to recover possession from A can A take defence/use shield of part performance ? When he has not sued to complete transaction – Does the law leave parties like that ? in a stalemate situation where B has the ownership and A the possession. The Court (Bom HC) says YES. Read on

The Statutory protection granted under Section 53A of the Act to a transferee in possession to continue his possession under an unregistered contract or instrument of transfer is not lost by lapse of time to file the suit for specific performance of contract- for acquiring title if he satisfies the essential requirements of the said Section 53A of the Act and it is not incumbent upon him to file such a suit within time to protect his possession after the lapse of time. The law is therefore correctly laid down in Nana Saheh’s case and not in Adinath’s case.

1. The question involved in this appeal relates to extent of protection available under Section 53-A of the Transfer of Property Act (for short, ‘the Act’) to maintain one’s possession derived through part performance. In the case of Nanasaheh reported in AIR 1957 Bom. 138, the Division Bench of this Court took a view that the vendor is entitled to resist the claim of eviction of a vendor; even if vendee’s claim for specific performance is barred by limitation.

Subsequently, the Division Bench in the case of Adinath reported in 1991 Mh. L.J. 256, took a view:

The agreement could not be enforced in law since relief of specific performance is beyond the period of limitation. The agreement in question met with its legal death. As a result, the protection under Section 53-A of the Act which flows from such agreement cannot survive beyond its life time which is the source of the protection.

8. The defendants were merely prospective purchasers and the title has not vested in them. Once the remedy for acquiring title through specific performance is lost to the vendee, equitable relief of protection to possession comes to end. Such protection is conterminous and does not survive beyond the span of the agreement. It is no doubt held that Section 53-A is a shield for the vendee and not a sword. Limitation has also nothing to do with, defence. However, the right asserted must subsist as per the limitation prescribed by law. Legally nonexistent right cannot oust the claim of vendor to recover possession, which was delivered in part performance of the contract. To allow the vendee to hold the possession even if the contract is not enforceable would lead to very anomalous, legal and factual situation. It would be paying dividends to vendee whose gesture suffers from laches and who lost the right to claim the transfer of title. It would be defeating the doctrine of equity which has been codified in Section 53-A of the Act.

2. Having regard to the conflict, the learned Single Judge formulated a question for being referred to the Full Bench as thus:

Whether once the remedy of acquiring title by a suit for specific performance is lost to the vendee by lapse of time, right to protect his possession upon satisfying the conditions contained in Section 53-A of the Transfer of Property Act comes to an end?

In other words, the question as posed is whether the transferee in possession, who does not avail the remedy of acquiring title by specific performance, can be regarded of having fulfilled the conditions envisaged by Section 53-A of the Act, so as to sustain the possession?

3. In the submission of Shri Khapre, the learned Counsel appearing for the appellant, the answer is in affirmative. According to him, to perform a contract specifically by execution and registration of a Deed of Sale is the obligation on the transferor. His failure or refusal does not cast any obligation on the transferee when he fulfils or is willing to fulfil other conditions of the contract. His right to hold possession remains intact even without registration of a Deed of Sale in his favour. Shri Khapre placed reliance on the non-obstante clause under Section 53-A of the Act.

This clause has a reference to a contract or instrument of transfer, which is compulsorily required to be registered under the relevant provisions of law, such as contract to lease, etc. Contract of sale of immovable property or parole agreement of transfer of possession by any instrument needs no compulsory registration. This clause has no reference to the registration of deed of sale. The clause does not save the registration of deed of sale of immovable property. The reliance of the learned Counsel is, therefore, completely misplaced.

The rules of limitation are not meant to destroy the rights of the parties. Section 3 of the Limitation Act 36 of 1963 for short “the Act”, only bars the remedy, but does not destroy the right which the remedy relates to. The right to the debt continues to exist notwithstanding the remedy is barred by the limitation. Only exception in which the remedy also becomes barred by limitation if the right is destroyed, for example under Section 27 of the Act a suit for possession of any property becoming barred by limitation, the right to property itself is destroyed.

… It is settled law that the creditor would be entitled to adjust, from the payment of a sum by a debtor, towards the time barred debt. It is also equally settled law that the creditor when he is in possession of an adequate security, the debt due could be adjusted from the security in his possession and custody.

5. Money claim, even if the remedy to recover is barred, does exist. The creditor by a private device, if available, can adjust such time barred claims against the payment to be made to a debtor. On questioning in a legal action at the behest of the debtor or guarantor, such adjustments can legally be upheld. The ratio can be extended thus far and no further.

Owing to loss of legal remedy, the creditor cannot take resort to a legal action to recover the time barred money claim. In a legal action by a debtor for recovery of his dues, the creditor cannot claim a set off or set up a counter claim of his time barred dues.

6. Parties to the contract of sale of immovable property, on their volition, can execute and register a Deed of Sale even if the legal remedy to acquire title is barred by limitation. However, transferee is precluded to initiate legal action to enforce the contract of sale. Such transferee is left with no device to acquire a title when transferor has initiated legal action to recover possession after specific performance is barred. Such transferee is without legally enforceable right to acquire title and no private device therefor is available. To such transferee, the right to acquire marketable title is completely lost and destroyed. Can right of such transferee to hold possession would prevail over to defeat the right of transferor to recover possession? The Authorities cited do not guide to answer the question.

7. According to the learned Counsel, specific performance of a contract of sale is a remedy to acquire and perfect the title in favour of the transferee. Even if such remedy is barred, protection to possession does subsist even thereafter. He sought support from the decisions in Nakul Chandra Polley v. Kalipada Ghosal and Anr. . Bholai Phukan v. Lakhi Kanta Ahom and Ors. AIR 1949 Assam 8, Jahangir Begum v. Gulam Ali Ahmed AIR 1955 Hyd. 101, Ekadashi v. Ganga and Ors. and Baruna Giri and Ors. v. Rajakishore Giri and Ors. .

Broadly it is laid down that Section 53-A of the Act:

(a) does not create a right in the transferee;

(b) does operate bar against the transferor in asserting title;

(c) confers right on transferee to protect possession, but precludes transferor to recover possession;

(d) does not import limitation and operates even if specific performance is barred and limitation does not create bar to defence.

8. The dictum as laid down leads to a situation:

(a) limitation does not bring infirmity to the right of a transferee without title to hold possession, but it cripples the right of vendor with title to recover possession;

(b) possession is one of the incidence of transfer of interest of a transferor. As a consequence, transferee holds possession irrespective of transfer of interest as a whole of the transferor as envisaged by Section 8 of the Act;

(c) as statutory limitation cannot be carved out in Section 53-A of the Act, protection available to transferee thereon runs indefinitely;

(d) shield becomes more effective than sword and equity then prevails over law.

The consequences thus follow lead to a seriously anomalous situation. This is not and cannot be a design of equity recognised by Section 53-A of the Act, which has been incorporated by Amending Act No. XX of 1929.

9. Earlier to 1929, an ignorant transferee of immovable property, who is placed in possession pursuant to the contract, could be evicted by the transferor by treating him as a trespasser. He had no statutory protection. He had to suffer for mischief and fraud practised by the holder of title. His right to hold possession as a prospective purchaser had to succumb to the claim of title holder. To relieve the transferee from such situation, the equitable principle enshrined in the Doctrine of Part Performance prevalent in England was pressed into service even in India.

10. On 25th April 1927, the Government of India appointed a Special Committee to examine the provisions of the Bill to amend the Act of 1882. By 16th August 1927, the Special Committee submitted its report. Clause 15 of the Report deals with Section 53-A. Portion relevant for the purpose is extracted:

We have proposed a more rigorous use of registration in the transfer of immovable properties than is now enjoined by law, and the changes we have proposed are, we think, calculated to minimise, if not to prevent perjuries and fraud.

The general ground upon which the doctrine is based is prevention of fraud. It is said that where one party has executed his part of the agreement in the confidence that the other party would do the same, it is obvious that, if the latter should refuse, it would be a fraud upon the former to suffer this refusal to work to his prejudice. Again, “a more general ground and that which ought to be the governing rule in cases of this sort is that nothing is to be considered as a part-performance which does not put the party into a situation which is a fraud upon him unless the agreement is fully performed.

(emphasis supplied)

Ignorant transferees in this country who have partly performed the contract require a greater measure of protection than even a transferee in England. When the transferee has in the faith that the transfer would be completed according to law taken possession, it would be inequitable to allow the transferor to treat the transferee as a trespasser. We, therefore, think that statutory recognition should be given to the doctrine of part-performance. At the same time, care should be taken that the law of registration is not evaded and that the introduction of the doctrine does not lead to “perjuries and frauds” which it is the object of the doctrine to prevent.

(emphasis supplied)

We think that it should be made clear that by reason of the part-performance, although the terms of the contract are made binding on the parties thereto, the transferee will not get a good title unless the transfer is effected according to law, that is, executed and registered. In this view, registration would still be necessary in order that the transferee may acquire a perfect and marketable title. But, although on account of non-registration, no title has passed, yet by reason of part-performance equities have arisen which Courts of law ought to recognise and enforce.

(emphasis supplied)

11. Intendment as revealed, to incorporate Section 53-A is thus:

(a) Equity needs to be enforced in favour of a person without marketable title;

(b) Registration is still inevitable. To make enforcement of registration more vigorous and registration is not allowed to be evaded;

(c) To minimize probabilities of perjuries and frauds;

(d) Safeguard against a fraud to be made available only when the agreement is fully performed.

Let us examine as to whether the intendment as made explicit would be achieved if the equitable protection is made available, even if the specific performance of a contract of sale, fails.

12. Having defined the intendment, the Committee proceeded to deal with the contrary view as then prevailing:

There is some conflict of decisions in the Indian Courts with regard to the period within which equitable relief can be given to parties to a transaction when there has been no registered instrument. One view is that such relief can he given only within the period during which a suit for specific performance would lie, the other view being that such relief can be given even after the period has expired. It seems to us that the first view, to which we propose to give effect by adding Section 30-A to the Specific Relief Act, 1877, does not go far enough, in all cases, to afford the relief which the equities arising out of part-performance require. Because, even after the period of limitation, when part-performance has taken place, the parties stand in the same relation to each other as they did within the period of limitation and the equities which arose within that period remain the same. In fact, the longer the possession in part-performance, the higher will be the equities. We, therefore, think that In order to be available at all times during which the transferee is in possession in part-performance of the contract and subject to the other conditions which we have proposed.

(emphasis supplied)

13. It is explicit that even earlier to 1929, the view was prevailing that the equity under the Doctrine of Part-Performance was extendable only till the specific performance lies. The Committee took cognizance of it and thought to give effect to it. This, the Committee suggested by proposing incorporation of Section 30-A of the Specific Relief Act.

Instead by Act No. XXI of 1929, the Legislature has incorporated Section 27-A in the Specific Relief Act, which reads as thus:

27. Specific performance in case of part performance of contract to lease.- Subject to the provisions of this Chapter, where a contract to lease immovable property is made in writing signed by the parties thereto or on their behalf, either party may, notwithstanding that the contract though required to be registered, has not been registered, sue the other for specific performance of the contract if-

(a) where specific performance is claimed by the lessor, he has delivered possession of the property to the lessee in part performance of the contract; and

(b) where specific performance is claimed by the lessee, he has, in part performance of the contract, taken possession of the property, or, being already in possession, continues in possession in part performance of the contract, and has done some act in furtherance of the contract:

Provided that nothing in this section shall affect the rights of the transferee for consideration who has no notice of the contract or of the part performance thereof.

This section applies to contracts to lease executed after the first day of April 1930.

This incorporation deals only with contract of a lease, which otherwise needs a compulsory registration. It prevents frustration of specific performance for want of registration. Equity as incorporated by this section is active which is in contradistinction to Section 53-A of the Act. The lessee in possession can protect his possession in terms of Section 53-A of the Act and can also seek specific performance on the strength of these provisions, even if the contract, though required, is not registered. However, this has no application to the contract of sale of immovable property.

14. The contract of lease merely transfers some interest of transferor. However title remains with the transferor, whereas contract of sale ultimately transfers all the interests including title in favour of transferee. The Committee though thought, has not given effect to the view in relation to the specific performance of such contract. The Committee observed that the view of confining relief in equity to a particular period does not go far enough. The Committee tried to argue that the relationship of the parties remains the same even after the specific performance is barred by limitation. In its thinking, longer the possession, more is the equity. The Committee amongst others was examining the prospect of giving statutory recognition to the doctrine of part performance. The Committee has not rejected the view, but completely traversed outside the term of reference while dealing with the view. Equitable protection in a contract of sale of immovable property has a predominant feature, which the Committee has not logically dealt with.

The Committee tried to argue against the view and adopted the view which is beyond the ambit of doctrine of part-performance. The relationship, even after limitation, might remain the same. To keep the relations of parties as they were for all the time to come, cannot be and has never been the intendment of doctrine of part-performance. Equity in its design, does not intend to drive at a stalemate. Equity, no doubt, has an intention to prevent injustice, but to keep the parties in same position and with some relationship indefinitely would be defeating of justice. Equity cannot be absolute in the terms observed by the Committee. It tends to defeat the provisions of the Law of Limitation and Transfer of Property.

15. Stretching the equity according to the longevity of possession itself shatters it and also defeats all the intendments as carved out for incorporation of Doctrine of Part-Performance in Section 53-A of the Act. The doctrine has been pressed into service to prevent the transferor from practising any fraud to evict the transferee in possession only till the time the contract can reach to its end, and not thereafter. Giving indefinite protection in equity to the possession, in turn, would activate the transferee to play mischief and fraud against the title holder. Such protection completely evades specific performance as well as registration of a Deed, which have specifically been envisaged as the indispensable intendment.

Enquiry into the question of willingness to perform the contract by the transferee would invite perjuries, fictitious assertions and vexatious litigation. It would place the transferee in a dominant position to enjoy the property without title and would exploit and deprive the transferor with title. Extent of such equity would flow completely in disproportion and also in distortion.

16. The Committee then records:

Inasmuch as the statutory recognition of part- performance is a matter of considerable importance, we think it desirable to explain in further detail the reasons for the various recommendations we are making-

In providing that the transferor shall be debarred from enforcing against a transferee any rights except such as arise out of the agreement, we desire to make it clear that the rights arising out of the contract as between the transferor and the transferee should be enforceable as if the transfer has been completed according to law. This provision will prevent a transferor from ejecting a transferee who has in part-performance of the contract taken possession, and at the same time enable the transferor to sue the transferee upon his covenant, say, to pay rent. The effect of this provision will be that the mutual covenants between the transferor and the transferee will be operative, though by reason of non-registration, no title has passed. This will necessitate the completion of the transfer according to law by execution and registration in order that the transferee may get a marketable title. Thus, the law of registration will not be evaded.

(emphasis supplied)

This is reiteration of intendment referred to earlier. The completion of transfer and registration cannot be achieved if equity is allowed to flow beyond the period legally admissible for a specific performance. If longevity of possession strengthens the equity, the marketable title will never pass to the transferee. His enjoyment of property without title and at the peril of right of title holder cannot be conceived in a principle of equity. Equity has no strength to operate in negation of statutory obligations of specific performance and ultimate execution and registration of Deed of Sale.

The Legislature has added anon-obstante clause in Section 53-A of the Act so as to protect possession even in absence of registration of agreement or instrument. If recommendation of the Committee had a sway on longevity of possession, the Legislature could add another non-obstante clause as nevertheless the specific performance fails, protection to possession continues. Equitable protection has no strength to go beyond the tenure of the contract,

17. The background which led to incorporation of Section 53-A does not prevail with same magnitude. Ignorance sensed by the Committee in 1927 is not in vogue after about 65 years. People in India, during recent past, might not have earned formal qualification, but they have been knowledgeable. Equity codified about 60 years before, needs to be regulated to advance the cause of justice and law, promote congenial/commercial relations and to minimise possibility of either party to play fraud. This can only be achieved if the Court refuses to take cognizance of equitable protection to a transferee, once the contract has become legally unenforceable.

Definite judicial view on this line was prevailing, as discussed, even prior to 1927. The Committee expressed to give effect to that view, but avoided. A collateral attempt, as discussed, was made by incorporating Section 27-A in the Specific Relief Act of 1877. It is pertinent to note that the Act of 1993, however, eliminated Section 27-A. As such, the view that equitable protection to possession is available till the specific performance lay, has a sway and must prevail.

18. Placing transferee in possession by way of part-performance is a parole agreement under the contract. Equity cannot usurp the authority to maintain such transitory situation to have the edge over the express provisions of law. A contract of sale of immovable property essentially culminates, unless frustrated, rescinded or otherwise becomes unenforceable in registration of a Deed of Sale. “Transferee is willing to perform his part of the contract” as envisaged by Section 53-A, necessarily includes taking by him all steps as permissible by law to carry the contract to its ultimate end. This could be with or without intervention of the Court. Such steps take within their sweep legal action to enforce the contract specifically.

Transferee placed in possession by way of part performance, who claims equity to protect his possession, has a responsibility of higher degree in the performance of contract. A transferor by performing his part under the contract has placed the transferee in possession even before the sale. The transferor has thus parted with some of the interest in the property in favour of the transferee. Such transferee has to take steps meticulously and effectively to achieve the ultimate result of the contract.

Sections 46 and 47 of the Contract Act deal with the time and place of performance and how it is to be worked out. Section 48 reads as thus:

When a promise is to be performed on a certain day, and the promisor has not undertaken to perform it without application by the promisee it is the duty of the promisee to apply for performance at a proper place and within the usual hours of business.

Section 50 gives upper hand to the transferee. While transferee is in action to carry the contract to its ultimate end protection under Section 53-A of the Act operates.

Mere willingness without positive action and meekly associating with failure or refusal of a transferor to execute a Sale Deed is equally a fraud on the part of the transferee. The contract cannot be said to be fully performed as envisaged by the Committee by mere offering of a balance consideration or any other part. Unless steps are taken for execution of Deed of Sale as legally admissible, there could not be a full performance of the contract. Registration in the case of Deed of Sale can be enforced only when specific performance is unavoidable. A transferee in possession is always in an advantageous position. To maintain his possession, when he does not take legal steps for specific performance would be encouraging him to play fraud and perjury. Protection envisaged under Section 53-A of the Act has to extinguish when the contract, which is a source of the right to hold possession, becomes legally unenforceable.

Even if statutory limitation cannot be imported in Section 53-A, protection in equity cannot have an indefinite durability. It cannot run even after the contract becomes legally unenforceable. Besides this, the claim for specific performance, even if within limitation in terms of Section 20 of the Specific Relief Act, the decree therefor is discretionary. The Court can refuse the decree. To make the protection of Section 53-A of the Act available to such transferee would be more than inequitable and unjust. Section 24 of the said Act precludes the transferee to claim compensation for a breach on the part of the transferor once the suit for specific performance fails. The intention of the Legislature is clear. The transferee cannot maintain his possession once having failed to avail specific performance during the period admissible by law. Whatever might be the extent of right of a transferee, his possession cannot receive protection in a legal action at the behest of the transferor, to recover possession. Equity cannot have any design to lead a situation of uncertainty. To grant protection beyond the specific performance of contract would evade transfer of property and registration. It would also Invite chaos, which is now vagrant. It would further completely defeat the basic intendments, which led to incorporate Section 53-A of the Act.

1. Having noticed during the hearing of the instant Second Appeal No. 231 of 1992, the conflict of views in the Division Bench Judgments of this Court in Nanasaheb v. Appa (for short

Nanasaheb’s case) and Adinath v. Policeman Housing Society 1991 Mh.L.J. 256 (for short, Adinath’s case), to which our learned brother Desai, J. was a party, the learned Single Judge of this Court has referred the following question for decision by the Full Bench:

Whether once the remedy of acquiring title by a suit for specific performance is lost to the vendee by lapse of time, the right to protect his possession upon satisfying the conditions contained in Section 53A of the Transfer of Property Act. comes to an end and whether to protect his possession it is incumbent upon the vendee to take recourse to a suit for specific performance within the period of limitation prescribed for such a suit.

2. We have gone through the draft of the Judgment prepared by our learned brother Desai, J. in answering the above question of law referred to us in the instant case. We, however, regret our inability to agree with his view upon the same. Hence, this separate Judgment.

3. It is not necessary to state the facts giving rise to the present reference in detail. Suffice it to state that the

respondents/plaintiffs filed a Suit for possession and mesne profits against the appellant in respect of the field Survey No. 29/2 admeasuring 10 acres of village Kalkhed, Taluka Khamgaon, District Buldana. The appellant/defendant inter alia raised a defence in the said Suit that he was in possession of the suit field pursuant to part performance of an agreement of sale of the said field dated 20-5-1974 (Ex. 38) executed by the husband of the respondent No. I by name Khushalchand Lakkad and therefore, his possession of the suit field was protected by Section 53A of the Transfer of Property Act. 1882 (for short ‘the Act’) as he was ready and willing to perform his part of the contract. The learned trial Court accepted the above plea or the appellant/defendant and dismissed the suit for possession and mesne profits filed by the respondents/plaintiffs,

4. The respondents /plaintiffs preferred an appeal against the above Judgment of the learned trial Court dismissing their suit for possession and mesne profits. In appeal preferred by them one of the contentions raised by them was that since the appellant/defendant did not file the suit for specific performance of the said contract of sale (Ex. 38), i.e. for getting the registered document of title in his favour within the period of limitation prescribed therefor, his right of possession in respect of the suit field was lost and it was not, therefore, open to him to defend his possession by claiming a right in that regard under Section 53A of the Act. The learned Lower Appellate Court accepted the above plea raised by the respondents/ plaintiffs in appeal in view of the Judgment of this Court in Adinath’s case cited supra. It, therefore, decreed the suit of the respondents/plaintiffs for ‘possession of the suit-field. It also allowed the claim for mesne profits partly but directed that in the said claim, adjustment should be given to the appellant/defendant in regard to the earnest money and the loan amount he had paid under the contract (Ex. 38).

5. Feeling aggrieved by the Judgment and decree of the learned Lower Appellate Court, the appellant/defendant has preferred the instant Second Appeal in this Court. In order to support his plea under Section 53A of the Act so as to protect his possession of the suit field, the appellant relied upon the Judgment of the Division Bench of this Court in Nanasaheb’s case cited supra before the learned Single Judge of this Court, before whom on Notice before admission, the Second Appeal was listed for hearing. Since the learned Single Judge found that the Judgment in Nanasaheb’s case undoubtedly supported the view that the plea in defence under Section 53A of the Act could be raised even though the Suit for specific performance of contract of sale at the instance of the transferee is barred by time to get the document of title registered in his favour, he was of the view that there was conflict of view on this question between Nanasheb’s case cited before him and Adinath’s case relied upon by the learned Lower Appellate Court. He, therefore framed the above quoted question of law for being answered by the Full Bench.

6. There is no manner of doubt that there is a clear conflict of view in Nanasaheb’s case and Adinath’s case as noticed by the learned Single Judge in the instant case. The Division Bench in Nanasaheb’s case has clearly held in para 8 of its Judgment that although there may be divergence of views prior to 1929 i.e. prior to enactment of Section 53A of the Act, upon the legal position about this question, which is referred to us, even in our court itself as noticed by it, there is no doubt about the same after enactment of Section 53A of the Act according to which it is its view that the defendant is entitled to protect his possession of the suit property obtained pursuant to the part performance or the agreement of sale even after his suit for specific performance of contract of sale is barred by time. On the other hand, the Division Bench in Adinath’s case has taken the view that once the remedy of acquiring title through specific performance of the agreement of sale is lost to the defendant by lapse of time, equitable relief of protection of his possession of the suit property under the agreement of sale incorporated under Section 53A of the Act comes to an end. Its reasoning is that the right assereted by the defendant under the agreement of sale subsists till the period of limitation prescribed by law for its enforcement and therefore, when it becomes unenforceable by lapse of time, the agreement in question meets with its legal death (the expression in Italics is used by the Division Bench). It was thus of the view that the protection under Section 53A of the Act which flows from the agreement of sale is conterminous and does not survive beyond its life time which is the source of its protection.

7. Having thus noticed the divergence of view between the two Division Benches of this Court in the above two cases, we proceed to consider the rival submissions of the parties upon the question of law referred to us. The learned Counsel for the appellant has urged before us that although, prior to 1929, i.e. prior to the introduction of Section 53A in the Act, there was some difference of view amongst the High Courts on the question whether the defendant/transferee was entitled to protect his possession on the basis of the equitable doctrine of part performance of contract, which was made applicable in England, particularly after his suit for specific performance of contract was barred by time, after enactment of Section 53A, the said controversy stands resolved in favour of the defendant/transferee. Apart from Nanasheb’s case, he has relied upon the Judgment of the Assam High Court in the case of Bholai Phukan v. Lakhi Kanta Ahom and Ors. AIR 1949 Assam 8, in support of his submission that Section 53A of the Act does not import limitation. He has also relied upon the Judgments in the following cases for the proposition that for a plea in defence there is no bar of limitation. See Nakul Chandra Polley v. Kalipada Ghosal and Anr. Jahangir Begum v. Gulam Ali Ahmed AIR 1955 Hyd. 101, and (3) Baruna Giri and Ors. v. Rajkishore Giri and Ors. . As regards the contrary view, it is expressed in the case of Sheikh Nagaji Sheikh Chattu v. Ashroba Pirtaji Bhoi and Ors. 1988 Mh. L.J. 414 by the learned Single Judge of this Court, apart from the Division Bench Judgment in Adinath’s case.

8. The learned Counsel for the appellant has then urged before us that except as provided in Section 27 of the Limitation Act, 1963, corresponding to Section 28 of the old Limitation Act, 1908, the rights and obligations under a contract do not come to an end by the expiry of the period of limitation prescribed by any law to a remedy to enforce them. Thus controverting the reasoning adopted by the Division Bench in Adinath’s case. In support he has relied upon the following Judgments of the Supreme Courts in Bombay Dyeing and Manufacturing Co. Ltd. v. The State of Bombay and Ors. , Khadi Gram Udyog Trust v. Shri Ram Chandraji Virajman Mandir and Punjab

National Bank and Ors. v. Surendra Prasad Sinha .

9. Section 53A of the Transfer of Property Act whose interpretation is in issue is reproduced below for ready reference:

Section 53A.

Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty,

and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract,

and the transferee has performed or is willing to perform his part of the contract,

then, notwithstanding that the contract, though required to be registered, has not been registered, or where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract :

provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.

10. Obviously Section 53A of the Act partially incorporates the English Doctrine of part performance of contract. It is enacted to protect the possession of a transferee by debarring the transferor from enforcing against him and the persons claiming under him any right in respect of such property other than a right expressly provided by the terms of the contract, provided the transferee fulfils the essential requirements of the said section which are as follows :-

1. There is a contract of transfer of immovable property.

2. The contract is for consideration.

3. It is in writing, signed by or on behalf of the transferor.

4. Its terms can be ascertained from writing.

5. The transferee has taken the possession or is already In possession of the property in part performance of the contract, and

6. He has done some act in furtherance of the contract.

See: Shri Shrauan v. Garbad AIR 1943 Bom. 406, Nathulal v. Fulchand .

If the above requirements are satisfied, Section 53A allows such protection to the transferee, notwithstanding the fact that the said contract is not registered although required to be registered or that when there is an instrument of transfer the transfer has not been completed in the manner prescribed therefor by the law for the time being in force.

11. It is an undisputed proposition that Section 53A of the Act provides for a defence to a transferee to protect his possession, if he satisfies the requirements of the said section. It confers no active title or right upon a transferee in possession under an unregistered contract or instrument of transfer because such possession is protected not by creating any right of possession upon him as such but by creating disabilities in the transferor i.e. by debarring him from enforcing any right against such a transferee in possession except the right expressly conferred upon him under the contract. This is also clear from the fact that under the proviso to Section 53A, even though the requirements of the said section are complied with by the transferee, he cannot affect the rights of a second transferee for consideration, who has no notice of the contract or the part performance thereof. Since the doctrine of part performance incorporated in Section 53A of the Act, thus provides for a defence to a transferee in possession it is described as a shield and not a sword. For the above proposition see :

12. It will be next necessary to see whether to a plea available to a transferee under Section 53A of the Act, the law of limitation is applicable. As herein before shown, a plea under Section 53A of the Act is available to the defendant/transferee by way of defence. It is well settled that the law of limitation applies to only institution of suits and not to a plea in defence. The above proposition is well settled by the Judgment of the Privy Council in the case of Sri Kishan Lal v. MSL Kashmiro AIR 1916 PC 172, in which it is held that the limitation would not apply to a defence. Following the above Judgment of the Privy Council, the Judgment of Jardine, J. in Hargovinddas v. Bajibhai (1889) 14 Bom. 222 and the Full Bench of the Madras High Court in Lakshmi Dass v. Roop Laul (1906) 30 Mad. 169 p. 178, this Court held in Gopal Bhaurao v. Jagannath AIR 1935 Bom. 326, that where a title of a person in possession is challenged, he may set forth any defence in favour of his right to the property and. the Statute will not come so as to prevent him from setting forth any relief i.e. (defence). It is pertinent to see that the Full Bench of the Madras High Court has categorically held in the case cited supra that because a party’s remedy as plaintiff to have an instrument avoided is time barred, it would not mean that his right to say, by way of equitable defence, if sued, that the instrument ought not to be enforced, is equally time barred. See also Orr. v. Sundra (1894)17 Mad. 255.

12A. It is thus clear that all that the Limitation Act does is to take away the remedy of a plaintiff to enforce his rights by an action; it is however, open to a defendant to put forward any defence though such defence as a claim made by him may be barred on the date it is put forward. The following observations of the then East Punjab High Court in para 7 of its judgment in the case of Ram Sarup v. Ram Chandar AIR 1949 E.P. 29, are also worthy of notice in this regard:

The fact that the defendant’s suit for cancellation of the sale was held to be barred by time cannot debar him from raising a plea that the sale was voidable at his instance for the simple reason that being in possession it was not necessary for him to bring the suit.

It is material to see that the above reasoning in Punjab case is pragmatic and sound and is equally applicable in cases where the defence is raised under Section 53A of the Act because when in possession, the defendant/ transferee may not think it necessary to bring the suit for specific performance of contract to acquire title and may remain content in maintaining his possession of the suit property in accordance with the provisions of Section53A of the Act which would protect his possession, if he would comply with its requirements.

13. However, since the view expressed in Adinath’s case is that the protection to a transferee under Section 53A of the Act which flows from the agreement of sale is conterminous and does not survive beyond its life time which is the source of its protection or in other words since the view expressed is that once the remedy of acquiring title by filing a suit for specific performance of contract is lost to the defendant/transferee by lapse of time, equitable relief of protection of his possession of the suit property incorporated under Section 53A of the Act comes to an end and after the limitation for a suit for specific performance of contract has expired, it becomes necessary to consider the question whether the rights and obligations created under the contract pursuant to which the possession is taken by the transferee really came to an end after the period of limitation for their enforcement has expired, and secondly, whether the legislative intent in enacting Section 53A is to make available its protection to the defendant/transferee in possession only till the period of limitation for filing a suit for specific performance of contract to get a registered document of title executed in his favour has not expired.

14. We shall first consider the question as to the legislative intent behind enactment of Section 53A which would also show as to what the mischief was which was intended to be prevented by its enactment. It would therefore, be useful to refer to the legislative history of Section 53A of the Act.

15. As already pointed out, Section 53A is introduced in the Act by the Transfer of Property (Amendment) Act, 1929 (for short, the Amending Act, 1929). However, prior to the introduction of Section 53A in the Act, by the above Amending Act, 1929 i.e. prior to 1929, the Courts in India also made applicable the doctrine of part performance of contract as in England, but there was difference of view in its application in India for which reason it appears that by amendment, the said right was codified by partial importation of the English Doctrine of part performance in Section 53A introduced in the Act. The protection granted under Section 53A of the Act is thus a statutory protection and does not merely depend upon equitable considerations.

15A. It will be at this stage useful to refer to the English Law upon the doctrine of part performance of contract. In England, Section 4, since re-enacted in Section 40 of the Law of Property Act, 1925, of the Statute of Frauds (1677) (29 Car. He. 3) provided that no action or suit could be brought on agreement relating to land which was not in writing signed by the parties to be charged with it. The said Statue was intended to guard against fraud. However, the strict application of the said provision in Section 4 of the Statute of frauds led to great hardship in cases where a parole agreement relating to land had been partly performed by one party and yet he could not sue the other party for its specific performance in view of the aforesaid Section 4 of the Statute of frauds. Thus, the latter party was enabled to practise a fraud upon the former. It is in such cases that the Courts of Equity stepped in on grounds of equity and enforced the specific performance of even a parole agreement holding that the part performance took such cases out of the statute of frauds. The general ground upon which the doctrine of part performance of parole agreement is based is thus prevention of fraud for “the Courts of equity will not permit the Statute to be made an instrument of fraud”. See Judgment of Lord Sclborne in Maddison v. Alderson (1883) 8 App Cs. 467 at p. 475 (H.L.) Story, in his book on equity, has observed in Section 1045 that where one party has executed his part of the Agreement in confidence that the other party will do the same, it is obvious that, if the latter were to refuse, it would be a fraud upon the former to suffer this refusal to work to his prejudice.

16. It however appears from

Chaproniere v. Lambert (1917)2 Ch. 356 at p. 361 :(1916) All. E.R. Rep. 1089, and Lester v. Foxcroft (1701) Colles 108 (H.L.) : Land T. Leading Cases Vol. II, 9th Edn. p. 410. that the correct principle according to these decisions on which the doctrine of part performance is based is that if a man has made a bargain with another and allowed that other to act upon it, he may have created an equity against himself which he cannot resist by setting up the want of a formality in the evidence of the contract out of which the equity in part arose. It is thus clear that although the doctrine of part performance of contract is not meant to nullify the requirements of a Statute as to the validity of a contract, which would make it enforceable at law, it takes notice of the fact that the transaction has progressed beyond the stage of a contract and that therefore certain equities have sprung up which cannot be disregarded. It thus takes the parole contracts out of the statute of frauds.

16A. Turning to the position in India prior to 1929 about application of the doctrine of part performance there was divergence of view on the said question amongst the High Courts whether the said doctrine is applicable in India or not. This is clear from the two Judgments of this Court referred to in Nona Saheb’s case cited supra viz. (1) Venkatesh Damodar v. Mallappa Bhimappa AIR1922 Bom. 9 and (2) Nemtulla v. Safiabu AIR 1935 Bom. 208, from which it appears that in this Court itself there was difference of view upon the question of application to the equitable doctrine of part performance of contract prior to the Amending Act. 1929.

17. It may be seen that Lord Shaw, J. in the Judgment of the Privy Council in the case of Mahomad Musa v. Aghore Kumar Ganguli, 42 Cal. 801, after quoting the Judgment of the House of Lords in Maddtson v. Alderson cited supra with approval observed as follows:

For equity will support a transaction clothed imperfectly in those legal forms to which finality attaches after the bargain has been acted upon. There was nothing in the laws of India inconsistent with these principles; on the contrary those laws followed the same rule.

Following the above Judgment of the Privy Council, it was held by the High Courts in India that the doctrine of part performance could be applied when the Instruments of transfer requiring registration were not registered or when agreements to transfer property were not followed up by formal deeds of transfer. See Vizapatam Sugar Development Company v. Muthuramareddi, 46 Mad. 919 (F.B.); Sandu Walji v. Bhikchand, 47 Bom. 621, Mating Myat v. Ms Dun 2 Rang. 285 (F.B.)

18. However, the question about the application of the Doctrine of part performance arose again before the Privy Council in the case of Ariff v. Judunath (1931) 58 Indian Appeals ’91 and in the case of Mian Pirbux v. Sardar Mohd Tahar,(1934) 61 Indian Appeals 388, in which it was held by it that the equity of part performance was not applicable in India and would not prevail in India so as to set at naught the express statutory provisions regarding Registration contained both in the Transfer of Property Act and the Registration Act. In Ariff s case cited supra, the Privy Council distinguished its Judgment in Musa’s case cited supra on the ground that on the relevant date in the said case the Transfer of Property Act was not applicable and therefore, no written conveyance was required.

19. It is, then pertinent to see that before enacting the Amending Act, 1929 which introduced Section 53A in the Act, the Government of India had constituted a Special Committee in accordance with the Legislative Department Resolution No. F. 43 27-G dated 25th April, 1927. The Statement of Objects and Reasons of the Bill pertaining to the Amending Act, 1929 (L.A. Bill No. 6 of 1929) shows that it relies upon the report of the said Special Committee which is contained in the Govt. of India’s Gazette, Part V dated 9th October, 1929 page 40, because it is stated in its Objects and Reasons that the said Bill is sufficiently explained in the report of the said Committee (see page 45 of the above Gazette). Appendix B to the report of the Special Committee shows that it contains the notes on clauses of the above Amendment Bill itself. Clause 15 of the Bill (see page 54 of the above Gazette) deals with the proposed provision of Section 53A to be introduced in the Act.

20. On perusal of the recommendations of the Special Committee under Clause 15, it is clear that the said Committee has exhaustively considered the doctrine of part performance as it existed in England, its good points, its pit-falls, particularly such as the enforcement of a parole Agreement in regard to which there was equally a possibility of a transferee practising a fraud upon the transferor by leading perjured evidence to prove the essential requirement of the doctrine of part performance. It has also examined the law applicable in India and the divergence of view in the High Courts. The question before the Special Committee thus was whether the equitable doctrine should be abrogated in India in favour of the rigid application of the law of Registration and other procedural requirements for transferring title to the transferee or whether the equitable doctrine of part performance, suitably framed should be made applicable in India also.

21. The Special Committee observed at pages 54 and 55 of the report that it was of the view that the time had not arrived when the said equitable doctrine should be abrogated in favour of a rigid application of the law of registration. According to it, the ignorant transferees in India, who had partly performed the contract required a greater measure of protection than even a transferee in England. It was, therefore of the view that when a transferee had in the faith that the transfer would be completed according to law taken possession, it would be inequitable to allow the transferor to treat him as a trespasser. It was thus of the view that the statutory recognition should be given to the doctrine of part performance, but the care should however be taken that the law of Registration was not evaded and that the introduction of the doctrine would not lead to perjuries and frauds, which it was its object to prevent.

22. With the above end in view, the Committee made the following recommendations:

i) that the agreement should be in writing signed by the party or his agent whom it is sought to bind;

ii) that the transferee should in part performance of the contract take possession of the property or, if already in possession, should continue in possession and in the latter case should do some act in furtherance of the contract;

iii) that the transferee, seeking to avail himself of the doctrine, should perform or he willing to perform his part of the bargain as contained in the writing;

iv) that when the contract has been partly performed all rights and liabilities under the contract should arise and be enforceable as between the parties to the contract notwithstanding that the transaction has not been completed according to law; and

v) that the application or the doctrine should not affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.

It is thus clear from the above recommendations that while recognising the doctrine of part performance the Special Committee has insisted upon the agreement to be in writing so as to avoid the pit-falls of perjured evidence and the fraud being practised by the transferee upon the transferor.

23. What is most important for our purpose is that the Special Committee had also considered the question whether the protection proposed to be given by it by introduction of Section 53A in the Act is available even after the period of limitation of the suit for specific performance of contract had expired because there were some conflicting decisions in the Indian Courts with regard to the period during which the equitable relief could be given to the parties to a transaction when there was no registered instrument, (see pages 55-56 of the Gazette). One view was that such relief could be given only within the period during which the suit for specific performance would lie the other view being that such relief could be given even after the expiry of the period to limitation for such a suit had expired. The Special Committee was of the view that since even after the period of limitation had expired when part performance had taken place the parties stood in the same relation to each other as they did within the period of limitation the equities which arose within that period remained the same. In fact according to it the longer the possession in part performance was, the higher would be the equities. It was therefore of the view that in order that the relief should be effective it ought to be available at all times during which the transferee was in possession in part performance of the contract i.e. even after the expiry of the period of limitation for the suit for specific performance of contract by the transferee to get the document of title registered in his favour of course subject to the other conditions which it had proposed.

24. It may also be seen that the Special Committee proposed to give effect to its view that the equitable relief should be given only during the period during which a suit for specific performance would lie by adding new Section 30A in the Specific Relief Act 1877 but then it was to the view that such amendment would not go far enough in all cases to afford the relief which the equities arising out of part performance would require because as pointed out hereinabove according to it the parties would stand in the same relation even after the expiry to the period of limitation so far as the equities were concerned and also because according to it the longer the possession the higher would be the equities. For this reason also, it was of the view that the protection granted to the defendant/transferee by introduction of Section 53A should not be restricted to the period during which his suit for specific performance would lie.

25. It is pertinent to see that although as per the Original Bill i.e. Bill No. 7 of 1929 for enactment of Transfer of Property (Amendment) Supplementary Act, 1929, it was proposed to add Section 30-A to the Specific Relief Act, 1877, the Select Committee to which the said Bill was referred found that its place was after Section 27 and therefore as per the amendment proposed by it, it was added as Section 27A in the Specific Relief Act, 1877. Section 27A, however protected only the rights of the lessor and the lessee by providing them with a remedy for specific performance of contract in case of part performance of contract of lease, even though it was not registered. The essential difference between Section 27A introduced into Specific Relief Act, 1877 and Section 27A to the Act is that the lessee could base his claim under Section 27A and enforce the same by filing a suit whereas under Section 53A of the Act, it was not open to the transferee to enforce his right by filing a suit. It is pertinent to see that Section 27A was deleted when the new Specific Relief Act, 1963 was enacted.

26. It is further pertinent to see that by Section 10 of the aforesaid Supplementary Amending Act, 1929, the proviso was introduced in Section 49 of the Indian Registration Act, 1908 in which it was provided that unregistered documents affecting immovable property and required by the said Act or the Transfer of Property Act to be registered can be received as evidence of a Contract in a Suit for specific performance under Chapter 11 of the Specific Relief Act, 1877 or as evidence of part performance or a contract for the purposes of Section 53A of the Act or as evidence of any collateral transaction not required to be effected by registered Instrument.

27. The above legislative history of the Amending Act, 1929 introducing Section 53A in the Act thus shows the selling in which the said section was introduced in the Act. The Statement of Objects and Reasons for the Amending Act, 1929 shows that the report of the Special Committee hereinbefore referred to has sufficiently explained the objects and reasons for its enactment. It is well settled that in construing a statute, the Court is entitled to take into account such external or historical facts as may be necessary to understand the subject matter of the statute or to have regard to the surrounding circumstances, which existed at the time of the passing of the Statute. See Lord Halsbury’s Judgment in Harron v. Rathmines Rathgar Improvement Commissioner (1892) A. C. 498 (H. L.) at page 502. See also Harrietta Nair Advard v. A.G. of Canada AIR 1930 Privy Council 120 at page 125.

In the Construction of Statutes it is, of course, at all times and under all circumstances permissible to have regard to the state of things existing at the time the Statute was passed and to the evils, which as appears from the provisions, it was designed to remedy.

The above canon of construction enunciated in the above case is quoted with approval by the Supreme Court in the case of D. N. Banerjee v. P. R. Mukhrjee para 12.

28. We may also refer to what is known as “mischief rule” as laid down in the well-known Heydon’s case (1584) 3 Co. Rep. 7 a p 7b : 76 E.R.

637. The mischief rule is also known as a rule of purposive construction. See Anderson v. Ryen (1985) 2 All E. R. 355 (H.L.). The above rule enables consideration of the following four matters in construing an enactment:

i) What was the law before the making of the Act.

ii) What was the mischief or defect for which the law did not provide,

iii) What is the remedy that the Act has provided, and

iv) What is the reason of the remedy.

29. It is now well-settled that the report of the Commissions, the Enquiry Committees and the objects and reasons preceding the introduction of the Bill can also be referred to for finding out the setting in which the Statute is enacted i.e. for understanding the background, the antecedent state of affairs, the surrounding circumstances in relation to the Statute and the evil which the Statute was sought to remedy. As regards the use of Statement of Objects and Reasons as an external aid to construction, the rule is settled by catena of the judgments of the Supreme Court in this regard. See for instance:

Similarly, as regards the use of the Reports of Commissions, the Enquiry Committees as an external aid to construction, the rule is also settled by catena of Judgments of the Supreme Court in that regard. See for instance:

30. It is clear from the above legislative history of the Amending Act, 1929 that after examining rival views upon the equitable doctrine of part performance of contract, as applicable in England, rival views about its application in India, Its good points and pit-falls and the fact that fraud could be practised and that perjured evidence could be led by both the transferor and the transferee, the Special Committee has tried to balance the equities in favour of the transferor and transferee in partial importation of the said doctrine in proposing introduction of Section 53A in the Act as hereinbefore shown. The said Section 53A of the Act grants statutory protection to the defendant/transferee to protect his possession of the suit property if he satisfies the requirements of the said section.

31. As regards the question which is referred to us for decision, it is clear from the Report of the Special Committee that it intended to grant statutory protection to the transferee in possession under an unregistered document, even after the expiry of the period of limitation for a suit for specific performance of contract to get a registered document or title in his favour upon the equitable consideration that the longer was the possession in part performance, higher were the equities in his favour. In this regard it is pertinent to see that for the limited purpose of defending his possession in accordance with Section 53A of the Act and not for basing any title in himself upon the same, the unregistered document affecting immovable property is made admissible in evidence. Apart from the above view expressed by the Special Committee, even on general principles relating to law of limitation, it is well settled as hereinbefore held by us in paras 11 and 12 or the Judgment that a period of limitation is not applicable to a plea in defence and therefore not to Section 53A of the Act which enables the transferee in possession to raise a plea in defence to protect his possession.

32. It is pertinent to see that when the general principle of law of limitation is that it is not applicable to a plea in defence, it is necessary that there must be an express provision in the Statute so as to exclude or limit the application of the said general principle of law to a plea in defence under Section 53A of the Act. When there is no such limitation placed under Section 53A of the Act or any other statutory provision, there is no reason why the statutory protection granted to a transferee in possession under Section 53A of the Act upon the equitable consideration that he has performed his part of the contract and is ready and willing to perform further remaining obligations upon him under the contract should be whittled down by allowing the transferor to dispossess him although he has not shown his willingness to execute a registered document of title and has allowed the period of limitation to expire. As observed by the then East Punjab High Court in its Judgment cited supra being in possession which was protected by Section 53A of the Act, a transferee could remain content with his possession if he so chose and it was not a must for him that he should bring a suit for obtaining a registered document of title in his favour.

33. Moreover, on perusal of the Judgments of the various High Courts on this question, it is clear that the preponderance of the view after enactment of Section 53A of the Act is that the statutory protection afforded to a defendant/transferee under the said section is not lost by expiry of limitation for a suit for specific performance of contract for getting the document of title registered in his favour. There is no reason to deviate from the said view on the principle of stare decisis also when the above view has prevailed in the High Court for a long time after introduction of Section 53A in the Act. The Doctrine of stare decisis was exhaustively considered by the Supreme Court in its Judgment in the case of Wamanrao v. Union of India (1981) 2 SCC 367, although for reasons given in the said Judgment it was not invoked in deciding the constitutional validity of article 31A of the Constitution. The said Doctrine is firmly established in English and American Jurisprudence and is invoked in India also. See Bengal Immunity Co. Ltd. v. State of Bihar ; Mamleshwar

Prasad v. Kanahaiyalal ; Rajnarayan Pande v. Sant

Prasad Tewari ; and the Judgment of this Court in

Mitind v. State 1987 Mh. L.J. 572 paras 16, 17. The Full form of the principle is stare decisis et non qaieta movre, and it means to stand by decisions and not to disturb what is settled. It has however well recognised exceptions as pointed out by the Supreme Court in Wamanrao’s case cited supra but the question of interpretation and application of Section 53A of the Act does not fall in any of the said exceptions.

34. Although, there does not appear to be a direct decision of the Supreme Court on the question referred to us for decision, the Supreme Court seems to have indirectly accepted such a view as rightly pointed out in the Judgment of the division Bench of this Court in Nana Saheb’s case by referring to the Judgment of the Supreme Court in the case of Maneklal v. H. J. Ginwalla and Sons . In the said

Judgment of the Supreme Court the facts were that an agreement of lease was sanctioned by the State Government on 20th July, 1917 pursuant to which the lessee/ defendant came in possession in part performance of the said contract of lease. It is however, in 1933 that the plaintiffs discovered that there was no registered document of lease in favour of the defendant and they therefore, instituted the suit for ejectment against the lessee in the said year 1933, on the ground that he was a trespasser, when the suit for specific performance of contract at the instance of the lessee was barred by time. The Supreme Court still allowed the appellant/lessee to raise the defence under Section 53A of the Act and allowed it notwithstanding that his possession was under an unregistered contract.

35. More recently, in the Judgment of the Supreme Court in the case of Smt. Thakann Mathew v. M. Azamathulla Khan and Ors. J.T. , it was easier for the Supreme Court to grant relief of possession to the transferor since it was expressly found by it that the suit for specific performance of contract by the transferee was barred by time. But it had not done so. The facts in the said case show that the transferor had filed a suit for cancellation of the agreement of sale and for possession of the suit property against the transferee on the ground that the sale was not completed by him within the prescribed period of two months. It also claimed the further relief that the advance paid by him was liable to be forfeited. The trial Court granted a degree of cancellation of the agreement of sale and, directed the transferee/defendant to hand over the possession of the suit property to the transferee/plaintiff. It however, directed the transferor/plaintiff to refund the Earnest Money paid by the transferee/defendant to him with interest. Both the parties feeling aggrieved by the decree of the trial Court, filed appeals in the High Court. The High Court, however, deciding the appeal preferred by the transferee/ defendant not only reversed the decree of the trial Court against him but on the contrary in exercise of discretion under Order

7. Rule 7, Civil Procedure Code to do what is just and equitable granted a decree of specific performance of contract in his favour by directing the transferor/plaintiff to execute the registered Sale Deed in his favour on his depositing in the trial Court the balance of consideration. The High Court did not decide the cross-appeal filed by the transferor/plaintiff in respect of forfeiture of earnest money paid by the transferee/defendant.

36. The transferor/plaintiff challenged the above Judgment and decree of the High Court by filing an appeal in the Supreme Court. In para 9 of its Judgment, while reversing the decree of the High Court granting specific performance of contract in favour of the transferee/defendant in a suit for cancellation of agreement of sale and for possession filed by the transferor/ plaintiff, the Supreme Court held that the suit for specific performance of contract by the transferee/defendant was barred by time under Section 54 of the Limitation Act 1963 apart from the fact that in a suit for specific performance, the transferee was required to aver and prove that he had performed and was always ready to perform the essential terms of the contract to be fulfilled by him as required by Clause (c)of Section 16 of the Specific Relief Act, 1963. The Supreme Court, therefore, held that the High Court could not invoke its discretionary powers under Order 7, Rule 7 of Civil Procedure Code in favour of the defendant/transferee to override the statutory limitations contained in Section 16 of the Specific Relief Act, 1963 and Section 54 of the Limitation Act, 1963 which preclude the grant of relief of specific performance of a contract except within the period prescribed by the said section.

37. It is material to see that although the Supreme Court found that the suit for specific performance of contract of sale by the transferee/defendant was barred by time and therefore reversed the decree of specific performance of contract passed in his favour by the High Court, it did not straightway grant the relief of possession to the transferor/plaintiff which it could have easily done, if it was of the view that by reason of expiry of period of limitation for a suit for specific performance of contract, the transferee/defendant was not entitled to maintain his possession under Section 53A of the Act.

38. The Supreme Court, however, considered in the above case the question whether a decree for possession of the suit property could be passed in favour of the transferor/plaintiff in the suit filed by him when the defence put forward by the transferee/defendant was that he was entitled to protect his possession of the suit property on the basis of the doctrine of part performance of contract incorporated in Section 53A of the Act. since he was in possession of the suit property in pursuance of part performance of the contract and was ready to perform the essential terms of the contract. In considering the said question, it found that the main plea raised by the transferor/plaintiff in his suit in that regard was that the possession of the transferee/defendant was not referable to the contract in question of which the part performance was claimed by him as required by Section 513A of the Act. but was referable to the fact that, he had sought for temporary accommodation for 8 days pursuant to which, he obtained possession of the suit property and illegally continued in possession thereafter. However, according to the Supreme Court, the High Court without considering the said question, although decided by the trial Court against the transferee/defendant, held that there was no dispute that on payment of Rs. 15000/- on 16.11.1974, pursuant to the Agreement of sale, the transferee/defendant was put in possession of the house and was entrusted with the documents pertaining to the same. It is because the High Court did not consider the above plea of the transferor/plaintiff that the Supreme Court remitted the matter to the High Court for reconsideration and also for the reason that the cross-appeal filed by the transferor/ plaintiff was not decided by it along with the appeal of the transferee/ defendant.

39. The facts in the above case clearly show that since the suit of the transferee/defendant for specific performance was barred by time, the Supreme Court would have more readily preferred to grant a decree for possession in favour of the transferor/plaintiff, particularly when a long time had elapsed after filing of the suit by him, if it was of the view that by lapse of time, it was not open to the transferee/defendant to raise the defence under Section 53A of the Act. Instead, it had chosen to remit the case for consideration whether the possession or the transferee/defendant was in pursuance of the agreement of sale or not. The above Judgment thus indirectly supports the construction that even though the suit of the transferee/defendant for specific performance is barred by time, he is entitled to raise the defence under Section 53A of the Act to maintain his possession of the suit property.

40. It is necessary to bear in mind that formalities including registration of document etc. for transferring clear and perfect title to a transferee are creations of a statute since they are prescribed by it and therefore if the Statute so chooses upon some equitable consideration to confer some benefit upon the transferee notwithstanding that his title is inchoate or imperfect, it is not open to us to question the wisdom of such a course adopted by the Statute. It is pertinent to see that in view of Section 53A of the Act, the situation is that although the transferor has title, he cannot claim possession from the transferee and although the transferee is in possession and has fulfilled the essential terms of the contract, he cannot transfer possession of the immovable property to a third person or create any title in him only because there is no registered document of title in his favour. He is also debarred from claiming any protection of his possession against a second transferee for consideration who has no notice of the contract or part performance thereof. If it is the intention of the Statute to allow the transferee to continue in possession “under an unregistered contract or instrument or transfer on fulfillment of its requirement, so that an irrate transferor should see reason and execute the document of title in favour of such transferee, it is not open to us to curtail the statutory protection of such a transferee to continue in possession on the ground that he cannot get a perfect marketable title by lapse of time.

41. The above discussion is in fact sufficient to hold that the statutory protection granted under Section 53A of the Act to a transferee in possession of the immovable property under an unregistered contract q| instrument of transfer by debarring the transferor from enforcing any right in respect of the immovable property against the transferee except a right expressly provided for under the contract, is not lost to the transferee by expiry of limitation for the suit for specific performance of contract to get the document of title registered in his favour in regard to the suit property. However, since the reasoning in paras 7 and 8 of the Judgment in Adinath’s case or the proposition propounded therein is that when the period of limitation expires, the agreement of sale in question meets with its legal death and as a result the protection under Section 53A of the Act which flows from such agreement cannot survive beyond its life time which is the source of protection to the transferee, it is necessary to consider the validity of such a proposition.

42. As regards the question whether the contract is dead by lapse of time, which phraseology is used In Adinath’s case presumably meaning thereby that the rights and obligations created under the agreement come to an end on expiry or the period of limitation prescribed for the enforcement thereof, it is material to see that no such proposition is laid down under the law of contract. The modes of discharge of contract i.e. how the legal obligations assumed on making a contract stand dissolved are well known. There are five such ways of discharge or contract:

i) Unilateral discharge i.e. by giving unilateral notice by one party to another, or his intention to bring the relationship to an end.

ii) Discharge by Agreement between the parties.

iii) Discharge by performance i.e. if the rights and obligations under the contract are fulfilled by both the parties, the contract stands discharged bringing the contractual relationship between the parties to an end.

iv) Discharge by breach of a contractual obligation in its widest sense can give the innocent party an option to treat the contract as discharged subject of course to his right to claim damages for past breaches.

v) Discharge by frustration. When it is not possible to implement the rights and obligations of the contract because of certain supervening events, the contract would stand frustrated and automatically discharged on the basis or doctrine of frustration.

43. For the above modes of discharge of contract, see the Book “An Introduction to Law of Contract” by P. S. Atiyah, IIIrd Edition, Chapter XII relating to Discharge of the Contract. See also the discussion in this regard in Part IV of the Anson’s Law of Contract XXVth Edition by A, G. Guest. In addition to the above forms of discharge of contract the Anson’s Law of Contract considers in Chapter XVI, discharge by operation of law also. For the modes of discharge of contract, we can also usefully refer to para VI of Chitty on Contracts Vol. 1. XXIVth Edition relating to the performance and discharge of contract and also Chapter 8 of the Law of Contract in Halsbury’s Laws of England, Vol. 9, Fourth Edition, on discharge of contractual promises. In none of the above authoritative Books on law of contract, the expiry of period of limitation for enforcement of the rights and obligations under the contract is treated as a mode of discharge of the rights and obligations under the contract. The above modes of discharge of contract are also contained in various provisions of chapter IV of the Indian Contract Act relating to performance of contracts and Chapter IV of the Specific Relief Act, 1963 relating to rescission of contract.

44. It is thus clear from the above authoritative books on law of contract that by lapse of time for a suit for enforcement thereof, the rights and obligations under a contract do not come to an end. The well known rule is limitation bars a remedy and not a right to which the only exception carved out by statute is in regard to the title to an immovable property which is extinguished on expiry of limitation for instituting a suit for possession. Section 27 of the Limitation Act, 1963 which corresponds to Section 28 of the Limitation Act, 1908 contains the above exception to the well recognised rule that lapse of time bars only the remedy, but does not extinguish the right. Section 27 of the 1963 Act provides that when the period of limitation under the said Act for any person to institute a suit for possession of any property expires his right to such property is also extinguished. The said Section 27 (old Section 28) thus assists the person in possession to acquire prescriptive title, by adverse possession.

See Fakirappa Jatappa v. Ningappa Shiolingappa AIR 1943 Bom. 265.

45. What is however material of our purpose to be seen is that Section 27 of the 1963 Act (section 28 of the 1908 Act) cannot apply to persons who are in possession. The said section presupposes that a person who is not in possession of the property has by force of limitation lost his remedy to bring a suit for possession against the person, who is in possession of the same, it is held in the following cases that the above Section 27 (old Section 28) of the Limitation Act is not applicable to the defendant who relies on his actual possession of the property which has not been disturbed.

See : Bagauandas v. Bajibhai, 14 Bom. 222, Jardine J’s Judgment Gopal Bhaurao v. Jagannath AIR 1935 Bom 326. Orr v. Sundra, 17 Madras 255 which have been considered along with others in paras 12 and 13 of the Judgment,

46. For all the above foregoing reasons our view is that the Statutory protection granted under Section 53A of the Act to a transferee in possession to continue his possession under an unregistered contract or instrument of transfer is not lost by lapse of time to file the suit for specific performance of contract- for acquiring title if he satisfies the essential requirements of the said Section 53A of the Act and it is not incumbent upon him to file such a suit within time to protect his possession after the lapse of time. The law is therefore correctly laid down in Nana Saheh’s case and not in Adinath’s case.

BY THE COURT: Our answer to the question of law referred to the Full Bench in the instant case is thus in the negative and in favour of the appellant. Papers be now placed before the learned Single Judge taking Second Appeals for hearing on merits in the light of our Judgment. No order as to costs in this reference.

2. What would be the period of limitation for institution of a suit for recovery of `pledged ornaments’ is the question involved herein.

3. It arises in the following factual matrix: 2

On or about 26.06.1998, the respondent filed a civil suit against the appellant for recovery of certain items of jewellery allegedly pledged with him on 2.12.1987 for the purpose of obtaining loan of a sum of Rs. 7000/-. On the premise that the appellant had violated the provisions of the Madhya Pradesh Money Lenders Act, 1934 in relation to the aforementioned grant of loan, a criminal proceeding was initiated against him, which was marked as Case No. 511 of 1997. In the said criminal case, he admitted his guilt. A fine of Rs. 150/- was imposed on him. The charge was read over to him, which reads as under: &quot;The charge on you is that before date 29.3.97 complainant Laxmi Prasad was paid borrowed money to you but even after that you were demanding interest at 5%. Your this act is criminal offence under section 3, 4 of Money Lenders Act. Therefore, show cause as to why you should not be held guilty of the said offence.&quot;

said suit was decreed directing the appellant to return the said jewellery or in the alternative a decree for a sum of Rs. 20,000/-.

5. Aggrieved by and dissatisfied therewith the appellant preferred an appeal thereagainst. The said appeal was allowed by the learned XVIth Additional District Judge, Jabalpur, holding: (i) The judgment of the criminal court rendered on the basis of the purported admission of guilt made by the appellant was not admissible in evidence.

(ii) An admission of the guilt on the basis of a wrong legal advice is not binding on the appellant.

(iii) The suit was barred in terms of Article 70 of the Limitation Act.

6. The second appeal preferred by the respondent herein has been allowed by the High Court by reason of the impugned judgment. The High Court formulated the following substantial questions of law:

4

&quot;1. Whether the suit filed by the appellant was barred by limitation while the suit was filed within 3 years from the date of demand and refusal by the respondent?

2. Whether the admission of guilt in criminal case in respect of some transaction made by respondent is admissible in the present case to the extent of fact that there was transaction between the parties?&quot;

By reason of the impugned judgment, the High Court opined that the suit had been filed within the prescribed period of limitation having been brought within a period of three years from the date of refusal of the demand to return the pledged ornaments. The question No. 2 was also determined in favour of the respondent holding that admission of guilt in a criminal case would be admissible in evidence being relevant to the fact in issue.

(i) The alleged pledge of jewellery having admittedly been made in the year 1987 and the suit filed on 26.06.1998, the same must be held to be barred by limitation.

5

(ii) No document of pledge having been produced, service of notice by itself cannot give rise to a cause of action for filing a suit for recovery of the pledged ornaments.

8. Mr. Rohit Arya, learned senior counsel appearing on behalf of the respondent, on the other hand, would contend: (i) in view of Article 70 of the Limitation Act, 1963, the suit has rightly been found to have been instituted within the period of limitation.

(ii) Having regard to the provisions contained in Section 43 of the Indian Evidence Act, the judgment of the criminal court was admissible in evidence.

(iii) In terms of Section 58 of the Indian Evidence Act, things admitted need not be proved. The suit filed by the respondent has rightly been decreed.

9. Before adverting to the rival contentions of the parties raised before us, we may notice that the purported pledge of jewellery was made by the respondent herein for taking a loan of Rs. 7,000/- on 2.12.1987. Appellant 6

indisputably is a money lender. A criminal case for charging excess interest was instituted against him on 29.03.1997. On or about 29.11.1997, he pleaded guilty by reason whereof a fine of Rs. 150/- was imposed on him. Respondent thereafter served a notice upon the appellant asking him to return the pledged jewellery. As neither the said noticed was replied to nor the jewellery was returned, he filed the suit on 26.06.1998.

10. The cause of action for filing the suit was stated in para 3 of the plaint, which reads as under:

&quot;3. The plaintiff through counsel sent registered notice dated 12.5.98 and demanded the pledged jewels. Still the defendant has not returned the jewels of the plaintiff. Therefore, this suit is being preferred. The aforesaid notice sent by the counsel of the plaintiff was received by the defendant on 14.5.98.&quot;

11. Respondent examined himself as a witness in the suit. He stated that the appellant being his cousin brother, no document was executed. He also testified that in the criminal case, appellant having admitted his crime and 7

pledge of jewellery with him, a fine of Rs. 150/- was imposed and on in default thereof, imprisonment of five days was ordered.

12. Indisputably, the judgment in the criminal case was marked as an exhibit. Appellant also in his deposition stated as under: &quot;…This is correct that plaintiff filed a complaint against me before police and case was registered. This is also correct that I confessed upon advise from my advocate. This is correct that fine of Rs. 150/- was imposed on me in that case. This is correct that I do the money lending.&quot; He admitted that even one Chandra Kumar had borrowed money from him.

It was furthermore admitted by him that he received the notice (Exhibit P1) from the plaintiff but he had not replied thereto.

13. Indisputably, the law relating to the admissibility of a judgment in a criminal proceedings vis-`-vis the civil proceedings and vice-versa is governed by the provisions of the Indian Evidence Act. 8

14. Section 43 of the Indian Evidence Act reads, thus: &quot;43. Judgments, etc., other than those mentioned in Sections 40, 41 and 42, when relevant – Judgments, orders or decrees other then those mentioned in Sections 40, 41 and 42 are irrelevant, unless the existence of such judgment, order or decree, is a fact in issue, or is relevant, under some other provision of this Act.&quot;

In terms of the aforementioned provision, the judgment in a criminal case shall be admissible provided it is a relevant fact in issue. Its admissibility otherwise is limited.

It was so held in Anil Behari Ghosh v. Smt. Latika Bala Dassi and others [AIR 1955 SC 566] in the following terms: &quot;The learned counsel for the contesting respondent suggested that it had not been found by the lower appellate court as a fact upon the evidence adduced in this case, that Girish was the nearest agnate of the testator or that Charu had murdered his adoptive father, though these matters had been assumed as facts. The courts below have referred to good and reliable evidence in support of the 9

finding that Girish was the nearest reversioner to the estate of the testator. If the will is a valid and genuine will, there is intestacy in respect of the interest created in favour of Charu if he was the murderer of the testator. On this question the courts below have assumed on the basis of the judgment of conviction and sentence passed by the High Court in the sessions trial that Charu was the murderer. Though that judgment is relevant only to show that there was such a trial resulting in the conviction and sentence of Charu to transportation for life, it is not evidence of the fact that Charu was the murderer. That question has to be decided on evidence.&quot;

In Perumal v. Devarajan and others [AIR 1974 Madras 14], it was held:

&quot;2. Even at the outset, I want to state that the view of the lower appellate court that the plaintiff has not established satisfactorily that the first defendant or the second defendant or both were responsible for the theft is perverse and clearly against the evidence and the legal position. The lower appellate Court refused to rely on Exhibit A- 3 which is a certified copy of the judgment in C.C. No. 1949 of 1965. It is true that the evidence discussed in that judgment and the fact that the first defendant had confessed his guilt in his statement is not admissible in evidence in the suit. But it is not correct to state that even the factum that the first and the second defendants were charged under Sections 454, and 380, I.P.C. and they were convicted on those charges could not be admitted. The order of the Criminal Court is, in 10

my opinion, clearly admissible to prove the conviction of the first defendant and the second defendant and that is the only point which the plaintiff had to establish in this case…&quot; A similar issue is dealt in some details in Lalmuni Devi and Ors. v. Jagdish Tiwary and Ors. [AIR 2005 Patna 51] wherein it was held: &quot;14. Relying on the judgment of the Supreme Court inAnil Behari Ghosh v. Smt. Latika Bala Dassi and Ors., (supra), a Division Bench of this Court in its judgment reported in 1968 BLJR 197, Mundrika Kuer v. President, Bihar State Board of Religious Trusts, and 8 others, has laid down to the same effect. Paragraph 7 of the judgment is set out hereinbelow for the facility of quick reference :-

&quot;7. It is true that, if the Board acted capriciously and arbitrarily without any material whatsoever and attempts to administer private property, saying that it is a public religious trust, this Court may have to interfere in appropriate cases; but it cannot be said here that there were no prima facie materials to show that the trust is a public religious trust. The acquittal of the petitioner in the criminal case (Annexure-A) was very much relied upon; but it is well settled that acquittal or conviction in a criminal case has no evidentiary value in a subsequent civil litigation except for the limited purpose of showing that there was a trial resulting . in acquittal or conviction, as the case may be. The findings of the criminal Court are inadmissible.&quot;

11

15. A judgment in a criminal case, thus, is admissible for a limited purpose. Relying only on or on the basis thereof, a civil proceeding cannot be determined, but that would not mean that it is not admissible for any purpose whatsoever.

16. Mr. Sharma also relies upon a decision of this Court in Shanti Kumar Panda v. Shakuntala Devi[(2004) 1 SCC 438] to contend that a judgment of a civil court shall be binding on the criminal court but the converse is not true. Therein it was held:

&quot;(3) A decision by a criminal court does not bind the civil court while a decision by the civil court binds the criminal court. An order passed by the Executive Magistrate in proceedings under Sections 145/146 of the Code is an order by a criminal court and that too based on a summary enquiry. The order is entitled to respect and wait before the competent court at the interlocutory stage. At the stage of final adjudication of rights, which would be on the evidence adduced before the court, the order of the Magistrate is only one out of several pieces of evidence.&quot; 12

17. A civil proceeding as also a criminal proceeding may go on simultaneously. No statute puts an embargo in relation thereto. A decision in a criminal case is not binding on a civil court. In M.S. Sheriff &amp; Anr. v. State of Madras &amp; Ors. [AIR 1954 SC 397], a Constitution Bench of this Court was seized with a question as to whether a civil suit or a criminal case should be stayed in the event both are pending. It was opined that the criminal matter should be given precedence. In regard to the possibility of conflict in decisions, it was held that the law envisages such an eventuality when it expressly refrains from making the decision of one Court binding on the other, or even relevant, except for certain limited purposes, such as sentence or damages. It was held that the only relevant consideration was the likelihood of embarrassment. If a primacy is given to a criminal proceeding, indisputably, the civil suit must be determined on its own keeping in view the evidence which has 13

been brought on record before it and not in terms of the evidence brought in the criminal proceeding.

The question came up for consideration in K.G. Premshanker (supra), wherein this Court inter alia held:

&quot;30. What emerges from the aforesaid discussion is — (1) the previous judgment which is final can be relied upon as provided under Sections 40 to 43 of the Evidence Act; (2) in civil suits between the same parties, principle of res judicata may apply; (3) in a criminal case, Section 300 CrPC makes provision that once a person is convicted or acquitted, he may not be tried again for the same offence if the conditions mentioned therein are satisfied; (4) if the criminal case and the civil proceedings are for the same cause, judgment of the civil court would be relevant if conditions of any of Sections 40 to 43 are satisfied, but it cannot be said that the same would be conclusive except as provided in Section 41. Section 41 provides which judgment would be conclusive proof of what is stated therein.

31. Further, the judgment, order or decree passed in a previous civil proceeding, if relevant, as provided under Sections 40 and 42 or other provisions of the Evidence Act then in each case, the court has to decide to what extent it is binding or conclusive with regard to the matter(s) decided therein. Take for illustration, in a case of alleged trespass by A on B’s property, B filed a suit for declaration of its title and to recover possession from A and suit is decreed. Thereafter, in a criminal prosecution by B against A for trespass, judgment passed between the parties in civil proceedings would be relevant and the court may 14

hold that it conclusively establishes the title as well as possession of B over the property. In such case, A may be convicted for trespass. The illustration to Section 42 which is quoted above makes the position clear. Hence, in each and every case, the first question which would require consideration is — whether judgment, order or decree is relevant, if relevant — its effect. It may be relevant for a limited purpose, such as, motive or as a fact in issue. This would depend upon the facts of each case.

It is, however, significant to notice a decision of this Court in M/s Karam Chand Ganga Prasad &amp; Anr. etc. v. Union of India &amp; Ors. [(1970) 3 SCC 694], wherein it was categorically held that the decisions of the civil court will be binding on the criminal courts but the converse is not true, was overruled, stating:

&quot;33. Hence, the observation made by this Court in V.M. Shah case that the finding recorded by the criminal court stands superseded by the finding recorded by the civil court is not correct enunciation of law. Further, the general observations made in Karam Chand case are in context of the facts of the case stated above. The Court was not required to consider the earlier decision of the Constitution Bench in M.S. Sheriff case as well as Sections 40 to 43 of the Evidence Act.&quot;

Another Constitution Bench of this Court had the occasion to consider the question in Iqbal Singh Marwah &amp; Anr. v. Meenakshi Marwah &amp; Anr. [(2005) 4 SCC 370]. Relying on M.S. Sheriff (supra) as also various other decisions, it was categorically held: &quot;32. Coming to the last contention that an effort should be made to avoid conflict of findings between the civil and criminal courts, it is necessary to point out that the standard of proof required in the two proceedings are entirely different. Civil cases are decided on the basis of preponderance of evidence while in a criminal case the entire burden lies on the prosecution and proof beyond reasonable doubt has to be given.&quot; The question yet again came up for consideration in P. Swaroopa Rani v. M. Hari Narayana @ Hari Babu [AIR 2008 SC 1884], wherein the law was stated, thus :

&quot;13. It is, however, well-settled that in a given case, civil proceedings and criminal proceedings can proceed simultaneously. Whether civil proceedings or criminal proceedings shall be stayed depends upon the fact and circumstances of each case.&quot;

16

18. It is now almost well-settled that, save and except for Section 43 of the Indian Evidence Act which refers to Sections 40, 41, and 42 thereof, a judgment of a criminal court shall not be admissible in a civil suit.

19. What, however, would be admissible is the admission made by a party in a previous proceeding. The admission of the appellant was recorded in writing. While he was deposing in the suit, he was confronted with the question as to whether he had admitted his guilt and pleaded guilty of the charges framed. He did so. Having, thus, accepted that he had made an admission in the criminal case, the same was admissible in evidence. He could have resiled therefrom or explained away his admission. He offered an explanation that he was wrongly advised by the counsel to do so. The said explanation was not accepted by the trial court. It was considered to be an afterthought. His admission in the civil proceeding was admissible in evidence.

20. Section 58 of the Indian Evidence Act reads as under: &quot;58 – Facts admitted need not be proved No fact need to be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, before the hearing, 17

they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings:

Provided that the court may, in its discretion, require the facts admitted to be proved otherwise than by such admission.&quot;

21. We, therefore, are of the opinion that although the judgment in a criminal case was not relevant in evidence for the purpose of proving his civil liability, his admission in the civil suit was admissible. The question as to whether the explanation offered by him should be accepted or not is a matter which would fall within the realm of appreciation of evidence. The Trial Court had accepted the same. The first appellate court refused to consider the effect thereof in its proper perspective. The appellate court 18

proceeded on the basis that as the judgment of the criminal court was not admissible in evidence, the suit could not have been decreed on the said basis. For the said purpose, the admission made by the appellant in his deposition as also the effect of charge had not been taken into consideration. We, therefore, are of the opinion that the High Court cannot be said to have committed any error in interfering with the judgment of the first appellate court.

22. So far as the question of the applicability of the period of limitation is concerned, Article 70 of the Limitation Act would be applicable. It reads as under:

&quot;Description of suit Period of Time from which period limitation begins to run

70. To recover movable Three years The date of refusal after property deposited or demand.&quot; pawned from a depository

or pawnee.

In terms of the aforementioned provision, the period of limitation, thus, begins to run from the date of refusal after demand. 19

23. Appellant did not respond to the notice issued by the respondent asking him to return the pledged jewellery. The date of receipt of such a notice is 14.05.1998. The suit having been filed on 26.06.1998, thus, must be held to have been filed within the prescribed period of limitation.

24. Having regard to the fact that the averments contained in the paragraph 3 of the plaint were not traversed, the same would be deemed to have been admitted by him in terms of Order VIII, Rule 5 of the Code of Civil Procedure.

In Gautam Sarup v. Leela Jetly [(2008) 7 SCC 85], this Court held: &quot;14. An admission made in a pleading is not to be treated in the same manner as an admission in a document. An admission made by a party to the lis is admissible against him proprio vigore.&quot; [See alsoRanganayakamma and Another v. K.S. Prakash (D) By LRs and Others 2008 (9) SCALE 144]

25. For the reasons aforementioned, there is no merit in this appeal, which is dismissed accordingly. However, in the facts and circumstances of this case, there shall be no order as to costs. 20

Comment : In this case the court was faced with a query “whether there is a period of limitation for filing an application for passing of final decree (metes and bounds partition) after prelininary decree declaring their shares is passed ? Court held N O – as suit is still on hold and is not disposed off, there is no period of limitation, court said ideally it should be a seamless process – without any time gaps – so that litigant gets relief and not just a PAPER !Supreme Court of India

The first respondent and his mother filed a suit for partition against petitioner and two others in the year 1960 in the court of the First Additional Judge, Muzaffarnagar, for partition and separate possession of their one-third share in the plaint schedule properties and for rendition of accounts. The suit was in respect of three non-agricultural plots and some movables. After contest the suit was decreed on 25.2.1964 directing a preliminary decree for partition be drawn in regard to the one-third share of the plaintiffs in the said plots and a final decree be drawn up through appointment of a Commissioner for actual division of the plots by metes and bounds.

2

2. Feeling aggrieved the petitioner (and others) filed an appeal before the Patna High Court which was dismissed on 29.3.1974. The first respondent filed an application on 1.5.1987 for drawing up a final decree. The petitioner filed an application on 15.4.1991 to drop the final decree proceedings as it was barred by limitation. The said application was dismissed by the trial court holding that once the rights/shares of the plaintiff had been finally determined by a preliminary decree, there is no limitation for an application for affecting the actual partition/division in accordance with the preliminary decree, as it should be considered to be an application made in a pending suit. The said order was challenged by the petitioner in a revision petition which was dismissed by the High Court order dated 15.1.2009. The petitioner has filed this special leave petition seeking leave to appeal against the said decision of the High Court.

3. The appellant contends that when a preliminary decree is passed in a partition suit, a right enures to the plaintiff to apply for a final decree for division of the suit property by metes and bounds; that whenever an application is made to enforce a right or seeking any relief, such application is governed by the law of limitation; that an application for 3

drawing up a final decree would be governed by the residuary Article 137 of Limitation Act, 1963 (`Act’ for short) which provides a period of limitation of three years; that as such right to apply accrues on the date of the preliminary decree, any application filed beyond three years from the date of preliminary decree (that is 12.3.1964) or at all events beyond three years from the date when the High Court dismissed the defendant’s appeal (that is 29.3.1974) would be barred by limitation. Reliance was placed by the petitioner on the decision of this Court in Sital Parshad v. Kishori Lal [AIR 1967 SC 1236], the decision of the Privy Council in Saiyid Jowad Hussain v. Gendan Singh [AIR 1926 PC 93] and a decision of the Patna High Court in Thakur Pandey v. Bundi Ojha [AIR 1981 Patna 27] in support of his contention.

The issue:

4. `Partition’ is a re-distribution or adjustment of pre-existing rights, among co-owners/coparceners, resulting in a division of lands or other properties jointly held by them, into different lots or portions and delivery thereof to the respective allottees. The effect of such division is that the joint ownership is terminated and the respective shares vest in them in severalty. A partition of a property can be only among those having a 4

share or interest in it. A person who does not have a share in such property cannot obviously be a party to a partition. `Separation of share’ is a species of ‘partition’. When all co-owners get separated, it is a partition. Separation of share/s refers to a division where only one or only a few among several co-owners/coparceners get separated, and others continue to be joint or continue to hold the remaining property jointly without division by metes and bounds. For example, where four brothers owning a property divide it among themselves by metes and bounds, it is a partition. But if only one brother wants to get his share separated and other three brothers continue to remain joint, there is only a separation of the share of one brother. In a suit for partition or separation of a share, the prayer is not only for declaration of plaintiff’s share in the suit properties, but also division of his share by metes and bounds. This involves three issues: (i) whether the person seeking division has a share or interest in the suit property/properties; (ii) whether he is entitled to the relief of division and separate possession; and (iii) how and in what manner, the property/properties should be divided by metes and bounds?

5. In a suit is for partition or separation of a share, the court at the first stage decides whether the plaintiff has a share in the suit property and 5

whether he is entitled to division and separate possession. The decision on these two issues is exercise of a judicial function and results in first stage decision termed as `decree’ under Order 20 Rule 18(1) and termed as `preliminary decree’ under Order 20 Rule 18(2) of the Code. The consequential division by metes and bounds, considered to be a ministerial or administrative act requiring the physical inspection, measurements, calculations and considering various permutations/ combinations/alternatives of division is referred to the Collector under Rule 18(1) and is the subject matter of the final decree under Rule 18(2). The question is whether the provisions of Limitation Act are inapplicable to an application for drawing up a final decree.

6. Rule 18 of Order 20 of the Code of Civil Procedure (`Code’ for short) deals with decrees in suits for partition or separate possession of a share therein which is extracted below:

&quot;18. Decree in suit for partition of property or separate possession of a share therein.– Where the Court passes a decree for the partition of property or for the separate possession of a share therein, then, —

(1) if and in so far as the decree relates to an estate assessed to the payment of revenue to the Government, the decree shall declare the rights of the several parties interested in the property, but shall direct such partition or separation to be made by the Collector, or any gazetted subordinate of the Collector deputed by him in this 6

behalf, in accordance with such declaration and with the provisions of section 54;

(2) if and in so far as such decree relates to any other immovable property or to movable property, the Court may, if the partition or separation cannot be conveniently made without further inquiry, pass a preliminary decree declaring the rights of the several parties, interested in the property and giving such further directions as may be required.&quot;

The terms ‘preliminary decree’ and ‘final decree’ used in the said rule are defined in Explanation to section 2(2) of the Code and reads thus : &quot;A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final.&quot;

Section 54 of the Code dealing with partition of estate or separation of share, relevant for purposes of Rule 18(1) reads thus: &quot;Where the decree is for the partition of an undivided estate assessed to the payment of revenue of the government, or for the separate possession of a share of such an estate, the partition of the estate or the separation of the share shall be made by the Collector or any gazetted sub-ordinate of the Collector deputed by him in this behalf, in accordance with the law (if any) for the time being in force relating to the partition, or the separate possession of shares, of such estates.&quot;

Rule 13 of Order 26 of the Code dealing with Commissions to make partition of immovable property, relevant for purposes of Rule 18(2) reads thus :

7

&quot;Where a preliminary decree for partition has been passed, the Court may, in any case not provided for by section 54, issue a commission to such person as it thinks fit to make the partition or separation according to the rights as declared in such decree.&quot;

7. We may now turn to the provisions of the Limitation Act, 1963. Section 3 of the Act provides that subject to sections 4 to 24, every suit instituted, appeal preferred and application made after the prescribed period shall be dismissed. The term ‘period of limitation’ is defined as the period of limitation prescribed for any suit, appeal or application by the Schedule to the Act (vide clause (j) of section 2 of the Act). The term &quot;prescribed period&quot; is defined as the period of limitation computed in accordance with the provisions of the said Act. The Third Division of the Schedule to the said Act prescribes the periods of limitation for Applications. The Schedule does not contain any Article prescribing the limitation for an application for drawing up of a final decree. Article 136 prescribes the limitation for execution of any decree or order of civil court as 12 years when the decree or order becomes enforceable. Article 137 provides that for any other application for which no period of limitation is provided elsewhere in that division, the period of limitation is three years which would begin to run from the time when the right to apply accrues. It is thus clear that every application which seeks to 8

enforce a right or seeks a remedy or relief on the basis of any cause of action in a civil court, unless otherwise provided, will be subject to the law of limitation. But where an application does not invoke the jurisdiction of the court to grant any fresh relief based on a new cause of action, but merely reminds or requests the court to do its duty by completing the remaining part of the pending suit, there is no question of any limitation. Such an application in a suit which is already pending, which contains no fresh or new prayer for relief is not one to which Limitation Act, 1963 would apply. These principles are evident from the provisions of the Code and the Limitation Act and also settled by a series of judgments of different High Court over the decades (See : for example, Lalta Prasad vs. Brahma Din [AIR 1929 Oudh 456], Ramabai Govind v. Anant Daji [AIR 1945 Bom. 338], Abdul Kareem Sab vs. Gowlivada S. Silar Saheb [AIR 1957 AP 40], A. Manjundappa v. Sonnappa &amp; Ors. [AIR 1965 Kar. 73], Sudarsan Panda &amp; Ors. v. Laxmidhar Panda &amp; Ors. [AIR 1983 Orissa 121], Laxmi v. A.Sankappa Alwa [AIR 1989 Ker. 289]. We may also draw support from the judgments of this Court in Phoolchand vs. Gopal Lal[AIR 1967 SC 1470], Hasham Abbas Sayyad v. Usman Abbas Sayyad &amp; Ors. [2007 (2) SCC 355] and Bikoba Deora Gaikwad v. Hirabai Marutirao Ghorgare [2008 (8) SCC 198]. 9

8. Once a court passes a preliminary decree, it is the duty of the court to ensure that the matter is referred to the Collector or a Commissioner for division unless the parties themselves agree as to the manner of division. This duty in the normal course has to be performed by the court itself as a continuation of the preliminary decree. Sometimes either on account of the pendency of an appeal or other circumstances, the court passes the decree under Rule 18(1) or a preliminary decree under Rule 18(2) and the matter goes into storage to be revived only when an application is made by any of the parties, drawing its attention to the pending issue and the need for referring the matter either to the Collector or a Commissioner for actual division of the property. Be that as it may.

9. The following principles emerge from the above discussion regarding partition suits :

9.1) In regard to estates assessed to payment of revenue to the government (agricultural land), the court is required to pass only one decree declaring the rights of several parties interested in the suit property with a direction to the Collector (or his subordinate) to effect actual partition or separation in accordance with the declaration made by the 10

court in regard to the shares of various parties and deliver the respective portions to them, in accordance with section 54 of Code. Such entrustment to the Collector under law was for two reasons. First is that Revenue Authorities are more conversant with matters relating to agricultural lands. Second is to safeguard the interests of government in regard to revenue. (The second reason, which was very important in the 19th century and early 20th century when the Code was made, has now virtually lost its relevance, as revenue from agricultural lands is negligible). Where the Collector acts in terms of the decree, the matter does not come back to the court at all. The court will not interfere with the partitions by the Collector, except to the extent of any complaint of a third party affected thereby.

9.2) In regard to immovable properties (other than agricultural lands paying land revenue), that is buildings, plots etc. or movable properties: (i) where the court can conveniently and without further enquiry make the division without the assistance of any Commissioner, or where parties agree upon the manner of division, the court will pass a single decree comprising the preliminary decree declaring the rights of several parties and also a final decree dividing the suit properties by metes and bounds.

(ii) where the division by metes and bounds cannot be made without further inquiry, the court will pass a preliminary 11

decree declaring the rights of the parties interested in the property and give further directions as may be required to effect the division. In such cases, normally a Commissioner is appointed (usually an Engineer, Draughtsman, Architect, or Lawyer) to physically examine the property to be divided and suggest the manner of division. The court then hears the parties on the report, and passes a final decree for division by metes and bounds.

The function of making a partition or separation according to the rights declared by the preliminary decree, (in regard to non-agricultural immovable properties and movables) is entrusted to a Commissioner, as it involves inspection of the property and examination of various alternatives with reference to practical utility and site conditions. When the Commissioner gives his report as to the manner of division, the proposals contained in the report are considered by the court; and after hearing objections to the report, if any, the court passes a final decree whereby the relief sought in the suit is granted by separating the property by metes and bounds. It is also possible that if the property is incapable of proper division, the court may direct sale thereof and distribution of the proceeds as per the shares declared.

9.3) As the declaration of rights or shares is only the first stage in a suit for partition, a preliminary decree does not have the effect of disposing of 12

the suit. The suit continues to be pending until partition, that is division by metes and bounds, takes place by passing a final decree. An application requesting the court to take necessary steps to draw up a final decree effecting a division in terms of the preliminary decree, is neither an application for execution (falling under Article 136 of the Limitation Act) nor an application seeking a fresh relief (falling under Article 137 of Limitation Act). It is only a reminder to the court to do its duty to appoint a Commissioner, get a report, and draw a final decree in the pending suit so that the suit is taken to its logical conclusion.

10. The three decisions relied on by the petitioner (referred to in para 3 above) are not relevant for deciding the issue arising in this case. They all relate to suits for mortgage and not partition. There is a fundamental difference between mortgage suits and partition suits. In a preliminary decree in a mortgage suit (whether a decree for foreclosure under Rule 2 or a decree for sale under Rule 4 of Order 34 of the Code), the amount due is determined and declared and the time within which the amount has to be paid is also fixed and the consequence of non payment within the time stipulated is also specified. A preliminary decree in a mortgage suit decides all the issues and what is left out is only the action to be taken in 13

the event of non payment of the amount. When the amount is not paid the plaintiff gets a right to seek a final decree for foreclosure or for sale. On the other hand, in a partition suit the preliminary decrees only decide a part of the suit and therefore an application for passing a final decree is only an application in a pending suit, seeking further progress. In partition suits, there can be a preliminary decree followed by a final decree, or there can be a decree which is a combination of preliminary decree and final decree or there can be merely a single decree with certain further steps to be taken by the court. In fact several applications for final decree are permissible in a partition suit. A decree in a partition suit enures to the benefit of all the co-owners and therefore, it is sometimes said that there is really no judgment-debtor in a partition decree. A preliminary decree for partition only identifies the properties to be subjected to partition, defines and declares the shares/rights of the parties. That part of the prayer relating to actual division by metes and bounds and allotment is left for being completed under the final decree proceedings. Thus the application for final decree as and when made is considered to be an application in a pending suit for granting the relief of division by metes and bounds. Therefore, the concept of final decree in a partition suit is different from the concept of final decree in a mortgage 14

suit. Consequently an application for a final decree in a mortgage suit is different from an application for final decree in partition suits. A suggestion for debate and legislative action

11. The century old civil procedure contemplates judgments, decrees, preliminary decrees and final decrees and execution of decrees. They provide for a `pause’ between a decree and execution. A ‘pause’ has also developed by practice between a preliminary decree and a final decree. The `pause’ is to enable the defendant to voluntarily comply with the decree or declaration contained in the preliminary decree. The ground reality is that defendants normally do not comply with decrees without the pursuance of an execution. In very few cases, the defendants in a partition suit, voluntarily divide the property on the passing of a preliminary decree. In very few cases, defendants in money suits, pay the decretal amount as per the decrees. Consequently, it is necessary to go to the second stage that is levy of execution, or applications for final decree followed by levy of execution in almost all cases.

12. A litigant coming to court seeking relief is not interested in receiving a paper decree, when he succeeds in establishing his case. What he wants is relief. If it is a suit for money, he wants the money. If it is a 15

suit for property, he wants the property. He naturally wonders why when he files a suit for recovery of money, he should first engage a lawyer and obtain a decree and then again engage a lawyer and execute the decree. Similarly, when he files a suit for partition, he wonders why he has to first secure a preliminary decree, then file an application and obtain a final decree and then file an execution to get the actual relief. The common-sensical query is: why not a continuous process? The litigant is perplexed as to why when a money decree is passed, the court does not fix the date for payment and if it is not paid, proceed with the execution; when a preliminary decree is passed in a partition suit, why the court does not forthwith fix a date for appointment of a Commissioner for division and make a final decree and deliver actual possession of his separated share. Why is it necessary for him to remind the court and approach the court at different stages?

13. Because of the artificial division of suits into preliminary decree proceedings, final decree proceedings and execution proceedings, many Trial judges tend to believe that adjudication of the right being the judicial function, they should concentrate on that part. Consequently, adequate importance is not given to the final decree proceedings and 16

execution proceedings which are considered to be ministerial functions. The focus is on disposing of cases, rather than ensuring that the litigant gets the relief. But the focus should not only be on early disposal of cases, but also on early and easy securement of relief for which the party approaches the court. Even among lawyers, importance is given only to securing of a decree, not securing of relief. Many lawyers handle suits only till preliminary decree is made, then hand it over to their juniors to conduct the final decree proceedings and then give it to their clerks for conducting the execution proceedings. Many a time, a party exhausts his finances and energy by the time he secures the preliminary decree and has neither the capacity nor the energy to pursue the matter to get the final relief. As a consequence, we have found cases where a suit is decreed or a preliminary decree is granted within a year or two, the final decree proceeding and execution takes decades for completion. This is an area which contributes to considerable delay and consequential loss of credibility of the civil justice system. Courts and Lawyers should give as much importance to final decree proceedings and executions, as they give to the main suits.

17

14. In the present system, when preliminary decree for partition is passed, there is no guarantee that the plaintiff will see the fruits of the decree. The proverbial observation by the Privy Council is that the difficulties of a litigant begin when he obtains a decree. It is necessary to remember that success in a suit means nothing to a party unless he gets the relief. Therefore to be really meaningful and efficient, the scheme of the Code should enable a party not only to get a decree quickly, but also to get the relief quickly. This requires a conceptual change regarding civil litigation, so that the emphasis is not only on disposal of suits, but also on securing relief to the litigant. We hope that the Law Commission and Parliament will bestow their attention on this issue and make appropriate recommendations/amendments so that the suit will be a continuous process from the stage of its initiation to the stage of securing actual relief. The present system involving a proceeding for declaration of the right, a separate proceeding for quantification or ascertainment of relief, and another separate proceeding for enforcement of the decree to secure the relief, is outmoded and unsuited for present requirements. If there is a practice of assigning separate numbers for final decree proceedings that should be avoided. Issuing fresh notices to the defendants at each stage should also be avoided. The Code of Civil Procedure should provide for a 18

continuous and seamless process from the stage of filing of suit to the stage of getting relief. In money suits and other suits requiring a single decree, the process of suit should be a continuous process consisting of the first stage relating to determination of liability and then the second stage of execution and recovery, without any pause or stop or need for the plaintiff to initiate a separate proceedings for execution. In suits for partition and other suits involving declaration of the right and ascertainment/quantification of the relief, the process of the suit should be continuous, consisting of the first stage of determination and declaration of the right, second stage of ascertainment/division/quantification, and the third stage of execution to give actual relief.

Conclusion

15. In so far final decree proceedings are concerned, we see no reason for even legislative intervention. As the provisions of the Code stand at present, initiation of final decree proceedings does not depend upon an application for final decree for initiation (unless the local amendments require the same). As noticed above, the Code does not contemplate filing an application for final decree. Therefore, when a preliminary decree is passed in a partition suit, the proceedings should be continued by fixing 19

dates for further proceedings till a final decree is passed. It is the duty and function of the court. Performance of such function does not require a reminder or nudge from the litigant. The mindset should be to expedite the process of dispute resolution.

16. In view of the foregoing, we are of the view that the application filed by the plaintiff in this case for drawing up of a final decree, was rightly held to be not subject to any period of limitation. We therefore dismiss this special leave petition as having no merit, with a request to expedite the final decree proceedings.

1. This Special Leave Petition is directed against the judgment and order dated 5th October, 2007, passed by a learned Single Judge of the Punjab &amp; Haryana High Court, dismissing Civil Revision Petition No.5129 of 2007 which had been filed by the Petitioner herein against an order dated 4th August, 2007, passed by the Rent Controller, 2

Ludhiana. By his said order the Rent Controller dismissed the Petitioner’s application under Section 5 of the Limitation Act for condoning the delay in filing the application for leave to contest the eviction petition. Consequently, the application for leave to contest the eviction petition was also dismissed.

2. The Respondent herein filed an application for eviction of the Petitioner from the premises in question under Section 13-B of the East Punjab Urban Rent Restriction Act, 1949, hereinafter referred to as &quot;the 1949 Act&quot;. Notice of the application was issued to the petitioner/tenant in the prescribed form asking him to appear before the Rent Controller within 15 days from the date of service of the notice and to apply for leave to contest the petition. The tenant was served with the summons of the eviction petition on 19th May, 2005. The 15 days’ period indicated in the notice 3

for filing the application for leave to contest expired on 3rd June, 2005. Such an application was subsequently made the next day on 4th June, 2005, but was not accompanied by any application for condonation of the delay of one day in making the same. Thereafter, the petitioner filed an application under Section 5 of the Limitation Act for condonation of the said delay in filing the application which was dismissed by the Rent Controller on 4th August, 2007, along with the application for leave to defend the eviction petition. In dismissing the Petitioner’s application under Section 5 of the Limitation Act, 1963, the Rent Controller, relying on certain judgments of the Punjab &amp; Haryana High Court, held that the provisions of Section 5 of the Limitation Act were not applicable in proceedings before the Rent Controller, particularly, for condoning the delay in filing an application for leave to contest 4

the eviction petition.

3. The said decision of the Rent Controller, Ludhiana, was questioned in Revision Petition No.5129 of 2007 before the High Court and it was contended that the impugned order had been passed in violation of the provisions of Section 18-A(7) of the East Punjab Urban Rent Restriction Act, 1949, as also Section 17 of the Presidency Small Causes Courts Act, 1882. It was contended on behalf of the Petitioner that by virtue of Sub- section (7) of Section 18-A of the 1949 Act, the procedure prescribed for trial of a suit under the Small Causes Courts Act was also applicable for trial of eviction petitions under the 1949 Act and by virtue of Section 17 of the Small Causes Courts Act, the Code of Civil Procedure has been made applicable to eviction proceedings as well. It was also contended that it was, therefore, obligatory upon the part of the Rent Controller to 5

have considered the merits of the eviction petition and to direct the landlord to lead evidence to prove the grounds for eviction taken by him. It was also urged before the High Court that mere rejection of an application for leave to contest did not ipso facto entitle the landlord to an order of eviction. On the other hand, the Rent Controller should have recorded the evidence of the landlord and it is only after such evidence was recorded and the Rent Controller was satisfied as to the existence of grounds for eviction of the tenant under Section 13-B of the 1949 Act, that the order of eviction could be passed.

4. On consideration of the submissions made on behalf of the respective parties, the High Court took the view that the provisions of Section 18-A of the 1949 Act have an overriding effect on all other laws inconsistent therewith and that Sub- section (7) of Section 18-A of the 1949 Act and 6

Section 17 of the Presidency Small Causes Courts Act, 1882, were not attracted to the facts of the case or in a situation where leave to contest has been declined for any reason whatsoever. The High Court further held that under the circumstances, there was no statutory obligation upon the Rent Controller to frame issues or to try the eviction petition by calling upon the petitioner to lead evidence. The High Court further held that refusal to grant leave to contest amounts to admission of the contents of the eviction petition and if the eviction petition itself satisfies the requirements of Section 13-B of the 1949 Act, an order of eviction has to follow as a matter of course.

5. It is against the said order of the learned Single Judge of the High Court, dismissing the petitioner’s Revision Petition, that the present Special Leave Petition has been filed.

7

6. As indicated hereinbefore, the case of the Petitioner is that both the Rent Controller and the High Court had erred in law in holding that the provisions of the Limitation Act would not apply in a proceeding before the Rent Controller and that Section 18-A of the 1949 Act would have an overriding effect over Section 29(2) of the Limitation Act, 1963. It was reiterated that by virtue of Sub-section (7) of Section 18-A of the 1949 Act, the procedure prescribed for trial of suits in the Small Causes Courts Act, is also applicable for trial of eviction petitions since by virtue of Section 17 of the Small Causes Courts Act, the Code of Civil Procedure has been made applicable to eviction proceedings as well.

7. Appearing for the Petitioner, Mr. Ujjal Singh, learned advocate, referred to and relied upon the decision of this Court in Mukri Gopalan vs. 8

Cheppilat Puthanpurajil Aboobacker [(1995) 5 SCC 5], wherein a similar question had arisen with regard to the power of the Appellate Authority under Section 18 of the Kerala Buildings (Lease and Rent Control) Act, 1965, to condone the delay in filing an appeal after expiry of the period of limitation prescribed under the Act. This Court held that the conditions for applicability of Section 29(2) of the Limitation Act were satisfied since Section 18 is a special law and in the absence of any provision under the Limitation Act, for filing an appeal, the period of limitation provided under Section 18 would have to be treated to be different from that under the Limitation Act. It was held that as a consequence, Section 5 of the Limitation Act would be automatically attracted to an appeal under Section 18 in the absence of any express exclusion under the Rent Act. It was further held that since the District Judges 9

function as Appellate Authority under Section 18, such an authority is a court and not persona designata and, therefore, entitled to resort to Section 5 of the Limitation Act. It was further held that the Appellate Authority constituted under Section 18 of the Kerala Buildings (Lease and Rent Control) Act, 1965, functions as a Court and as a result the period of limitation under the said provisions governing appeals would be computed keeping in view the provisions of Sections 4 to 24 of the Limitation Act, 1963. Reference was made to a decision of this Court in Gaya Prasad Kar vs. Subrata Kumar Banerjee [(2005) 8 SCC 14], wherein it was held that having regard to the beneficial provisions of the West Bengal Premises Tenancy Act, 1956, which allowed extension of time for making deposit of arrears of rent, the provisions of the Limitation Act and, in particular, Section 5 thereof, would also be applicable.

10

8. Yet another decision of this Court in the case of Akesh Wadhawan &amp; Ors. vs. Jagdamba Industrial Corporation &amp; Ors. [(2002) 5 SCC 440], was referred to on behalf of the Petitioner in the context of the 1949 Act, in which it was held that subsidiary rules of interpretation envisage that in case of ambiguity, a provision should be so read as to avoid hardship, inconvenience, injustice, absurdity and anomaly. It was held that since a statute can never be exhaustive, courts have jurisdiction to pass procedural orders, though not specifically contemplated by statute and that such innovation is permissible on the basis of authority supported by the principles of justice, good sense and reason.

9. Certain other decisions were also referred to by learned counsel which are on similar lines.

10. On behalf of the Respondent it was submitted that Section 13-B had been introduced in the 1949 11

Act by way of amendment in 2001 to make special provisions for Non-Resident Indians who return to India and are in need of immediate possession of their building or buildings let out by them. Such benefit had been made available to a Non-Resident Indian only after a period of five years from the date on which the Non-Resident Indian became the owner of such building. It was contended that the provisions of the 1949 Act and, in particular, Section 13-B thereof, would have to be very strictly construed on account of the object with which it had been enacted. In this regard reference was made to a decision of this Court in Prithipal Singh vs. Satpal Singh (Dead) through its LRs. [(2010) 2 SCC 15], where an ex-parte eviction order based on ground of bonafide requirement of landlord was recalled by the Rent Controller exercising jurisdiction under Order 9 Rule 13 read with Order 37 Rule 4 and Section 151 of the Civil 12

Procedure Code. The said order was affirmed by the High Court observing that in view of Rule 23 of the Delhi Rent Control Rules, 1959, the Rent Controller is conferred with power to set aside the ex-parte order of eviction in exercise of jurisdiction under the aforesaid provisions of the Code. On the said orders being questioned in this Court it was held that Rule 23 of the aforesaid Rules could not be applied in view of Section 25-B which is a special code and provides for a specific and exhaustive procedure for eviction of a tenant by a landlord on ground of bonafide requirement. The order of the High Court was, therefore, set aside and that of the Rent Controller was restored.

11. Reference was also made to a Bench decision of the Punjab &amp; Haryana High Court in Ashwani Kumar Gupta vs. Siri Pal Jain [1998 (2) RCR 222], in a Civil Revision, where the very same question fell for consideration and it was held that when the 13

tenant had failed to file affidavit seeking leave to contest the proceedings within the time prescribed, the Rent Controller had no power to condone the delay. Certain other cases were also referred to on the same lines relating to the 1949 Act and Sections 13-B and 18-A thereof.

12. From the materials on record it is clear that the application for leave to contest the application under Section 13-B of the 1949 Act has to be made within 15 days from the date of service of the summons. In this case, the application for leave to contest the application was made one day after the said period had expired. The issue for consideration before us is whether the Rent Controller was right in rejecting the application on the ground that he had no jurisdiction to condone the delay under the Act. The matter was considered at length by the High Court, which, as indicated hereinabove, came to the conclusion that 14

Section 18-A of the 1949 Act would have an over- riding effect on all other laws inconsistent therewith and that Sub-Section (8) of Section 18-A of the 1949 Act and Section 17 of the Presidency Small Causes Courts Act, 1882, were not attracted to the facts of the case.

13. The views expressed by the High Court also formed the subject matter of the decision in Prithipal Singh’s case (supra), though in the context of the Delhi Rent Control Act, 1958, and the rules framed thereunder. This Court was of the view that Section 25-B of the Delhi Rent Control Act was a complete Code by itself and other provisions could not, therefore, be brought into play in such proceedings. In the instant case, the same principle would apply having regard to the fact that the Rent Controller had not been conferred with power under Order 9 Rule 13 C.P.C. to recall an ex-parte order passed earlier. 15

14. Apart from the above is the view taken by this Court in Prakash H. Jain vs. Marie Fernandes[(2003) 8 SCC 431], where it was specifically held that since the Competent Authority under Section 40 of the Maharashtra Rent Control Act, 1999, was not a court but a statutory authority with no power to condone the delay in filing an affidavit and application for leave to contest, the Competent Authority had no other option but to pass an order of eviction in the manner envisaged under the Act.

15. The decision in Mukri Gopalan’s case (supra) relied upon by Mr. Ujjal Singh is distinguishable from the facts of this case. In the facts of the said case, it was the District Judges who were discharging the functions of the Appellate Authority and being a Court, it was held that the District Judge, functioning as the Appellate 16

Authority, was a Court and not persona designata and was, therefore, entitled to resort to Section 5 of the Limitation Act. That is not so in the instant case where the Rent Controller appointed by the State Government is a member of the Punjab Civil Services and, therefore, a persona designata who would not be entitled to apply the provisions of Section 5 of the Limitation Act, 1963, as in the other case. The decision in Gaya Prasad Kar’s case (supra) is also of little help to the Petitioner since under the West Bengal Premises Tenancy Act, 1956, powers have been vested in the Rent Controller to extend the time for making deposits of arrears of rent, which would make the provisions of the Limitation Act applicable in such specific instances.

16. The instant case stands on a different footing and, in our view, is covered by the decision of this Court in Gaya Prasad Kar’s case (supra), 17

wherein it was held that the Competent Authority had no other option but to pass an order of eviction since it had no power to condone the delay in filing an application for leave to contest.

17. Section 13-B is a power given to a Non-Resident Indian owner of a building to obtain immediate possession of a residential building or scheduled building when required for his or her use or for the use of any one ordinarily living with and dependent on him or her. The right has been limited to one application only during the life time of the owner. Section 18-A(2) of the aforesaid Act provides that after an application under Section 13-B is received, the Controller shall issue summons for service on the tenant in the form specified in Schedule II. The said form indicates that within 15 days of service of the summons the tenant is required to appear before the Controller and apply for leave to contest the same. 18

There is no specific provision to vest the Rent Controller with authority to extend the time for making of such affidavit and the application. The Rent Controller being a creature of statute can only act in terms of the powers vested in him by statute and cannot, therefore, entertain an application under Section 5 of the Limitation Act for condonation of delay since the statute does not vest him with such power.

18. In such case, neither the Rent Controller nor the High Court had committed any error of law in rejecting the Petitioner’s application for seeking leave to contest the suit, since the same had been filed beyond the period prescribed in the form in Schedule II of the Act referred to in Section 18-A(2) thereof.

19

19. The Special Leave Petition must, therefore, fail and is dismissed accordingly. However, there will be no order as to costs.

Post navigation

Write to us

DISCLAIMER

DISCLAIMER
The views & opinions expressed herein, are done with a view to make law more understandable to the layman, law students & the junior members of the bar. This should not be construed as legal advise or opinion. As per the rules of the Bar Council of India, we are not permitted to solicit work and advertise. The user acknowledges the following: * there has been no advertisement, personal communication, solicitation, invitation or inducement of any sort whatsoever from us or any of our members to solicit any work through this website; the user wishes to gain more information about us for his/her own information and use; * the information about us is provided to the user only on his/her specific request and any information obtained or materials downloaded from this website is completely at the user’s volition and any transmission, receipt or use of this site would not create any lawyer-client relationship. * The information provided under this website is solely available at your request for informational purposes only, should not be interpreted as soliciting or advisement. We are not liable for any consequence of any action taken by the user relying on material/information provided under this website. In cases where the user has any legal issues, he/she in all cases must seek independent legal advice.